REG - MobilityOne Limited - Final Results and Restoration in Trading
20/08/2024 07:00
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RNS Number : 9804A MobilityOne Limited 20 August 2024
20 August 2024
MobilityOne Limited
("MobilityOne", "Company" or the "Group")
Audited results for the year ended 31 December 2023
Lifting of Suspension of Trading on AIM
Notice of Annual General Meeting
MobilityOne (AIM: MBO), the e-commerce infrastructure payment solutions and
platform provider, announces its full year audited results for the year ended
31 December 2023.
MobilityOne's Annual Report and Accounts for the year ended 31 December 2023
(the "Annual Report and Accounts") and Notice of Annual General Meeting
("AGM") will be posted to shareholders shortly and will also be made
available shortly on the Company's website at www.mobilityone.com.my
(http://www.mobilityone.com.my) .
Following the publication of the Company's Annual Report and Accounts, the
suspension of the Company's securities from trading on AIM is expected to be
lifted at 07.30 a.m. today, 20 August 2024.
The Company's AGM will be held at 4.00 p.m. (Malaysia time) on 11 September
2024 at Level 2, Wisma LMS, No. 6, Jalan Abd. Rahman Idris, Off Jalan Raja
Muda Abdul Aziz, 50300 Kuala Lumpur, Malaysia.
For further information, please contact:
MobilityOne Limited +6 03 8996 3600
Dato' Hussian A. Rahman, CEO www.mobilityone.com.my
har@mobilityone.com.my (mailto:har@mobilityone.com.my)
Allenby Capital Limited (Nominated Adviser and Broker) +44 20 3328 5656
Nick Athanas/Vivek Bhardwaj
About the Group:
MobilityOne is one of the leading virtual distributors of mobile prepaid
reload and bill payment services in Malaysia. With connections to various
service providers across industries such as banking, telecommunications,
utilities, government agencies, and transportation, the Group operates through
multiple distribution channels including mobile wallets, e-commerce sites, EDC
terminals, automated teller machines, kiosks, and internet & mobile
banking. Holding licenses in regulated spaces including acquiring, e-money,
remittance and lending, the Group offers a range of services to the market,
including wallet, internet, and terminal-based payment services, e-money,
remittance, lending, and custom fintech ecosystems for communities. The
Group's flexible, scalable technology platform enables cash, debit card, and
credit card transactions from multiple devices while providing robust control
and monitoring of product and service distribution.
For more information, refer to our website at www.mobilityone.com.my
(http://www.mobilityone.com.my)
Chairman's Statement
For the year ended 31 December 2023
Introduction
The Directors are pleased to present the audited consolidated financial
statements for MobilityOne Limited for the financial year ended 31 December
2023.
The Group's revenue increased by £7.91 million to £241.67 million in the
financial year ended 31 December 2023,
(year ended 31 December 2022: revenue of £233.76 million) as a result of
increased demand from the Group's main products and services, namely the
mobile phone prepaid airtime reload and bill payment business through the
Group's banking channels (i.e. mobile banking and internet banking) and
electronic data capture terminals as well as third parties' e-wallet
applications. The Malaysian market continued to account for the majority of
the Group's revenue.
As a result of an increase in cost of sales, administrative expenses, finance
costs as well as the Group's share of its 49%-owned associated company's loss,
namely Sincere Acres Sdn Bhd which was acquired on 4 October 2023, the Group
registered a loss after tax of £1.41 million in the financial year ended 31
December 2023 (year ended 31 December 2022: profit after tax of £16,628).
The Group's international remittance services and e-money business in Malaysia
and payment solution business in Brunei and the Philippines continued to
remain small and did not make a significant contribution to the Group in the
financial year ended 31 December 2023. As announced previously by the Group,
the Group has discontinued to explore new business in the Philippines.
However, if there is any new business opportunity in the future, the Group may
consider exploring.
As at 31 December 2023, the Group had cash and cash equivalents (excluding
other financial assets which are fixed deposits with maturities over 3 months)
of £3.54 million (31 December 2022: cash and cash equivalents (excluding
other financial assets which are fixed deposits with maturities over 3 months)
of £4.36 million) while the secured loans and borrowings from financial
institutions increased to £4.22 million (31 December 2022: £3.87 million)
mainly due to payments for higher cost of sales and higher administrative
expenses.
Review of activities and outlook
The Group's business activities are predominately concentrated in Malaysia.
According to the Central Bank of Malaysia in March 2024, it was reported that
the Malaysian economy is projected to grow between 4.0% and 5.0% in 2024,
underpinned by continued expansion in domestic demand and improvement in
external demand,
In May 2024, the Central Bank of Malaysia reported that the Malaysian economy
grew at a higher rate of 4.2% in the first quarter of 2024 (fourth quarter
2023: 2.9%), driven by stronger private expenditure and positive turnaround in
exports. Household spending was higher amid continued growth in employment and
wages. Growth in 2024 is anticipated to be driven by resilient domestic
expenditure with additional support from the recovery in external demand. On
the domestic front, continued employment and wage growth is also anticipated
to support household spending. Increased tourism and associated tourist
spending is expected to continue. This growth outlook remains subject to
downside risks stemming from weaker-than-expected external demand, further
escalation in geopolitical conflicts and larger declines in domestic commodity
production. Nonetheless, there are upside risks from greater spillover from
the tech upcycle, more robust tourism activities and faster implementation of
existing and new investment projects.
Mobile phone prepaid airtime reloads and bill payments continued to be the
main business activities for the Group in the year ended 31 December 2023. The
Group's international remittance and e-money businesses in Malaysia as well as
the payment solution business in Brunei and Philippines are expected to remain
insignificant.
On 1 June 2022 the Company announced, amongst other things, that MobilityOne
Sdn Bhd ("M1 Malaysia"), the Group's wholly-owned operating subsidiary in
Malaysia, which received a licence from MasterCard Asia/Pacific Pte Ltd
("MasterCard") to issue MasterCard prepaid cards, had obtained approval from
the Central Bank of Malaysia to introduce international scheme prepaid cards
under the MasterCard's brand in Malaysia. The Group has commenced the issuance
of MasterCard prepaid cards in Malaysia on a small scale to complement the
Group's existing e-wallet and this part of the Group's end-to-end payment
ecosystem.
On 11 May 2023, the Company announced that M1 Tech Limited ("M1 Tech"), the
Group's wholly-owned subsidiary in the UK, had withdrawn its application to
the Financial Conduct Authority (the "FCA"), the financial regulatory body in
the UK, for authorisation as an electronic money institution to provide
e-money services in the UK. This follows receipt of further feedback from the
FCA requesting further information in relation to certain disclosures relating
to M1 Tech's proposed business plan. On 29 September 2023, the Group announced
that it was reviewing its proposed business plan to expand its business in the
UK and its options in relation to submitting a further revised FCA
application. Following an extensive review process, the Group has decided not
to submit a revised application to the FCA and instead will continue to focus
on its businesses in Malaysia as well as other new business opportunities.
On 26 June 2023 M1 Malaysia entered into a joint venture cum shareholders
agreement with Syed Faisal Algadrie Bin Syed Hassan ("Syed Faisal") to
incorporate "Qube Nexus Sdn Bhd" ("Qube") to explore any suitable business
opportunities from the Kingdom of Saudi Arabia. M1 Malaysia and Syed Faizal
had incorporated Qube on 14 September 2023 and own 80% and 20% of the equity
interest in Qube, respectively. There has not been any material development in
relation to this joint venture.
As part of the Group's business plans for long-term growth, the Group has the
following initiatives:
(1) Money transfer business via SWIFT
As previously disclosed, the Group intends to expand its money transfer
business via the Society for Worldwide Interbank Financial
Telecommunication ("SWIFT") network. The Group is still working with a bank
in Malaysia on the integration process while waiting for the Central Bank of
Malaysia's approval, the timings of which continue to remain uncertain. The
Company will make any relevant announcements on the arrangement with SWIFT
as and when is appropriate.
(2) Disposal of OneShop Retail Sdn Bhd ("1Shop") and proposed
joint venture with Super Apps Holdings Sdn Bhd ("Super Apps")
On 19 October 2022, M1 Malaysia entered into a share sale agreement (the
"Share Sale Agreement") with Super Apps for the disposal by M1 Malaysia of a
60% shareholding in the Group's wholly-owned non-core subsidiary 1Shop to
Super Apps (together the "Disposal"). Concurrently, M1 Malaysia entered into
a joint-venture cum shareholders agreement with Super Apps and 1Shop (together
the "Proposed Joint Venture"). The intention of the Disposal and Proposed
Joint Venture is to establish a new joint venture to expand the Group's
e-products and services business initially in Malaysia.
The Disposal was initially subject to the completion of a merger exercise
between Technology & Telecommunication Acquisition Corporation ("TETE")
and Super Apps which includes certain approvals by the United States
Securities and Exchange Commission ("SEC") (together the "Merger Exercise").
Subsequently it was announced on 1 March 2024 that M1 Malaysia had entered
into a supplementary agreement with Super Apps to amend the terms and
conditions of the Share Sale Agreement in preparation for the Merger Exercise
(the "Supplementary Agreement"). Under the new terms and conditions of the
Supplementary Agreement, completion of the Disposal is no longer conditional
on the Merger Exercise completing. In this regard, it was instead agreed that
the Disposal completes upon entry of the Supplementary Agreement.
Notwithstanding completion, if the Merger Exercise does not complete, M1
Malaysia is entitled to purchase back the 60% interest in 1Shop from Super
Apps for a nominal consideration of RM1.00.
It was further agreed that irrespective of the completion of the Disposal and
subject to the completion of the Merger Exercise, Super Apps shall pay M1
Malaysia the following consideration:
(a) RM40.0 million (c. £6.84 million) in cash within 14 days upon completion
of the Merger Exercise; and
(b) RM20.0 million (c. £3.42 million) in cash within 180 days upon completion
of the Merger Exercise.
In addition, pursuant to the terms of the Proposed Joint Venture, M1 Malaysia
undertook to provide the necessary technical and business support to 1Shop and
guaranteed that 1Shop will achieve revenues of at least RM560.0 million
(equivalent to c. £95.8 million) in the financial year ending 31 December
2023 or any other period as mutually agreed (the "Revenue Target"). As the
Merger Exercise has been delayed, the period to achieve the Revenue Target
shall be re-assessed and agreed with Super Apps in due course. In order to
achieve the Revenue Target, Super Apps undertakes to provide all the necessary
working capital requirements of 1Shop. This will be supplemented through Super
Apps, in conjunction with 1Shop, collaborating with other organisations.
Moreover, Super Apps shall procure TETE to issue shares in TETE (the "TETE
Shares") to a stakeholder to be mutually agreed by M1 Malaysia and Super Apps
with aggregate value of RM20.0 million (equivalent to c. £3.42 million)
within 14 days upon completion of the Merger Exercise. The issue price for the
TETE Shares to the stakeholder will be determined at a later date. M1
Malaysia will only be entitled to receive the TETE Shares from the stakeholder
following 1Shop achieving the Revenue Target.
Tete Technologies Inc, a wholly-owned subsidiary of TETE, has since filed a
draft proxy statement ("TETE Proxy Filing") with the SEC and the TETE Proxy
Filing is subject to the approval by the SEC. The Company will release further
announcements as and when appropriate.
It was announced by the Group on 18 June 2024 that the deadline to complete
the Merger Exercise was extended from 20 July 2024 to 20 January 2025. There
can be no guarantee that the payment for the consideration of the Disposal and
the Proposed Joint Venture can be completed as they are conditional on the
completion of the Merger Exercise, which is out of the Group's control. The
payment for the consideration of the Disposal and the completion of the
Proposed Joint Venture are expected to contribute positively to the financial
position and future growth prospects of the Group.
(3) Acquisition of Hati International Sdn Bhd ("Hati") via
Sincere Acres Sdn Bhd ("Sincere")
On 29 September 2023, M1 Malaysia entered into a share sale agreement with
United Flagship Development Sdn Bhd ("Vendor") to acquire a 49% equity
interest in Sincere for a total cash consideration of RM30.0 million (c.
£5.217 million) to be paid to the Vendor in two tranches (the "Acquisition").
On 4 October 2023, the acquisition of Hati via Sincere completed and the first
tranche, representing RM2.0 million (c. £0.348 million), has since been paid
to the Vendor. The second tranche, representing the balance of RM28.0 million
(c. £4.869 million) (the "Second Tranche"), was originally required to be
paid by M1 Malaysia by 8 March 2024 (the "Second Tranche Payment Date").
On 8 March 2024, the Second Tranche Payment Date was extended until 8
September 2024 ("Extended Second Tranche Payment Date"). However, any payment
in relation to the Second Tranche made after the Second Tranche Payment Date
will be subject to an interest charge of 10% per annum. The balance amount
payable for the Second Tranche (including any interest charge) shall be
reduced by RM1.0 million (c. £0.174 million) when the payment is made by the
Extended Second Tranche Payment Date.
Sincere is an investment holding company with its sole business activity
comprising of owning a 100% equity interest in Hati, an operating company in
Malaysia. Hati is a healthcare information systems provider in Malaysia
focused on healthcare software development and information technology. Through
the use of cloud service platforms and software system solutions, Hati has
developed a product suite comprising of hospital information systems, clinical
information systems, business intelligence platforms and Internet of Things
(IoT)/Artificial Intelligence (AI) enabled platforms.
The Acquisition has a number of synergistic benefits for both the Group and
Hati. The Acquisition is anticipated to enable the Group to vertically
integrate its existing electronic payment systems and services with Hati's
suite of existing products to support payment methods such as credit cards,
debit cards and eWallets via online payments and over the counter payments. In
addition, the Acquisition will result in Hati being able to utilise the
Group's infrastructure and engineering know-how to automate electronic billing
and invoicing.
As part of the Group's long-term growth strategy, the Group intends to develop
a payment system that integrates the Group's e-claims and e-payments services
with insurance companies thereby resolving cash flow issues typically faced by
hospitals and clinics. The Group also intends to explore potential
collaborations with the Group's telecommunication partners in order to enable
Hati's real-time IoT/AI enabled healthcare devices to operate over 5G cellular
networks. With the above, the Group can also expand its customers base for
its existing electronic payment systems and services. In addition, the
Acquisition will enable the Group to amongst other benefits, diversify its
existing business activities into the growing healthcare information systems
industry.
(4) Acquisition of Jejak Semangat Sdn. Bhd. ("Jejak")
On 7 March 2024, the Group announced that M1 Malaysia entered into a Share
Sale Agreement with MBP Solutions Sdn. Bhd., LMS Technology Distributions Sdn.
Bhd., Dato' Hussian A Rahman and Derrick Chia Kah Wai to acquire 100% of the
issued share capital of Jejak for a nominal cash consideration of RM4.00 (c.
£0.70). The acquisition completed on 2 July 2024.
Jejak holds a license issued by the Malaysian Ministry of Communications and
Multimedia to provide network services in Malaysia for a period until 23 April
2031. The license will complement M1 Malaysia's current business of providing
mobile prepaid reload services.
The Group anticipates a challenging business environment and remains cautious
about the outlook for the remainder of 2024, despite the reported expectations
that the Malaysian economy will grow between 4.0% and 5.0%. This caution is
due to rising inflation and increased expenses, including higher
administrative, infrastructure, and marketing costs, among other related
expenses. Consequently, the Group's gross profit margins for its products and
services will continue to be affected as it strives to maintain or grow its
business.
The expected completion of the Proposed Joint Venture with Super Apps and the
Merger Exercise as disclosed above will significantly enhance the Group's
financial position and future growth. Additionally, the implementation of
Hati's potential projects in the foreseeable future is expected to benefit the
Group through the share of any profit from this associated company. The Group
will continue to invest in and enhance its research and development to support
business and technological advancements and to form partnerships for future
growth.
.............................................
Abu Bakar bin Mohd Taib
Chairman
Date: 19 August 2024
Report of the Directors
For the year ended 31 December 2023
The Directors are pleased to submit their report together with the financial
statements of the Group and the Company for the year ended 31 December 2023.
PRINCIPAL ACTIVITY
The principal activity of the Group in the year under review was mainly in the
business of providing e-commerce infrastructure payment solutions and
platforms.
KEY PERFORMANCE INDICATORS
Year ended 31.12.2023 Year ended 31.12.2022
£ £
Revenue 241,673,952 233,761,671
Operating (loss)/profit (1,050,815) 378,369
(Loss)/Profit before tax (1,369,614) 278,978
Net (loss)/profit for the year (1,408,132) 16,628
KEY RISKS AND UNCERTAINTIES
Operational risks
The Group is not insulated from general business risk as well as certain risks
inherent in the industry in which the Group operates. In particular, this
includes technological changes, unfavourable changes in government and
international policies (including licensing requirements), the introduction of
new and superior technology or products and services by competitors and
changes in the general economic, business and credit conditions.
Dependency on distributorship agreements
The Group relies on various telecommunication companies to provide the
telecommunication products. As a result, the Group's business may be
materially and adversely affected if one or more of these telecommunication
companies cut or reduce drastically the supply of their products. The Group
has distributorship agreements with telecommunication companies such as
CelcomDigi Berhad and Maxis Communication Berhad, which are subject to
periodic renewal.
Dependency on business partners
As the revenue of the Group is substantially through the business partners'
various channels, such as banking (i.e. mobile banking and internet banking)
and e-wallet applications, the Group is dependent on its business partners
which include several major banks in Malaysia. The Group is exposed to the
risks that any of the business partners may cease the business relationship
with the Group in the future and the Group's ability to grow may be materially
and adversely affected.
Rapid technological changes/product changes in the e-commerce industry
If the Group is unable to keep pace with rapid technological development in
the e-commerce industry it may adversely affect the Group's revenues and
profits. The e-commerce industry is characterised by rapid technological
changes due to changing market trends, evolving industry standards, new
technologies and emerging competition. Future success will be dependent upon
the Group's ability to enhance its existing technology solutions and introduce
new products and services to respond to the constantly changing technological
environment. The timely development of new and enhanced services or products
is a complex and uncertain process.
Demand of products and services
The Group's future results depend on the overall demand for its products and
services. Uncertainty in the economic environment may cause some business to
curtail or eliminate spending on payment technology. In addition, the Group
may experience hesitancy on the part of existing and potential customers to
commit to continuing with its new services.
Financial risks
The Group is exposed to liquidity risk and interest rate risk arising
principally from its borrowings. If the Group is unable to generate sufficient
cashflow from its operations, it may affect the Group's ability to meet its
financial obligations. In addition, any significant increase in interest rates
may result in higher interest expense and this may affect the Group's cashflow
for its operational working capital.
Please refer to Note 3 for further information.
REVIEW OF BUSINESS
The results for the year and financial position of the Group are as shown in
the Chairman's statement.
RESULTS AND DIVIDENDS
The consolidated total comprehensive loss for the year ended 31 December 2023
was £1,950,236 (2022: total comprehensive profit of £370,950) which has been
transferred to reserves. No dividends will be distributed for the year ended
31 December 2023.
DIRECTORS
The Directors are:
Abu Bakar bin Mohd Taib (Non-Executive Chairman)
Dato' Hussian @ Rizal bin A. Rahman (Chief Executive
Officer)
Derrick Chia Kah Wai (Deputy Chief Executive Officer)
Seah Boon Chin (Non-Executive Director)
Azlinda Ezrina binti Ariffin (Non-Executive Director)
The beneficial interests of the Directors holding office at 31 December 2023
in the ordinary shares of the Company, were as follows:
Ordinary shares of 2.5p each
Interest at 31.12.23 % of issued capital
Abu Bakar bin Mohd Taib Nil Nil
Dato' Hussian @ Rizal bin A. Rahman 53,465,724 50.30
Derrick Chia Kah Wai * 1,800,000 1.69
Seah Boon Chin Nil Nil
Azlinda Ezrina binti Ariffin Nil Nil
* The wife of Derrick Chia Kah Wai holds 1,943,000 ordinary shares in
the Company, which is equivalent to 1.83% of the Company's issued capital.
The Directors also held the following ordinary shares under options:
Interest at 31.12.23
Abu Bakar bin Mohd Taib 500,000
Dato' Hussian @ Rizal bin A. Rahman 800,000
Derrick Chia Kah Wai 2,000,000
Seah Boon Chin 2,000,000
Azlinda Ezrina binti Ariffin Nil
The options were granted on 5 December 2014 at an exercise price of 2.5p.
The period of the options is ten years.
The Directors' remuneration of the Group is disclosed in Note 4.
SUBSTANTIAL SHAREHOLDERS
Based on the register of shareholders as of 2 August 2024, the Company had the
following shareholders with interests in 3% or more of the issued share
capital of the Company pursuant to Part VI of Article 110 of the Companies
(Jersey) Law 1991:
Ordinary shares of 2.5p each
Number of ordinary shares % of issued capital
Dato' Hussian @ Rizal bin A. Rahman 53,465,724 50.30
Estate of Dato' Shamsir bin Omar 9,131,677 8.59
Vidacos Nominees Limited FGN 6,656,540 6.26
Pershing Nominees Limited PERNY 5,216,958* 4.91
Lawshare Nominees Limited SIPP 4,439,011 4.18
HSDL Nominees Limited MAXI 3,226,569 3.04
* Including 1,800,000 ordinary shares and 1,943,000 ordinary shares in
the Company for Derrick Chia Kah Wai and his wife, respectively.
PUBLICATION OF ACCOUNTS ON COMPANY WEBSITE
Financial statements are published on the Company's website, which can be
found at www.mobilityone.com.my. The maintenance and integrity of the website
is the responsibility of the Directors. The Directors' responsibility also
extends to the financial statements contained therein.
INDEMNITY OF OFFICERS
The Group does not have insurance cover against legal action brought against
its Directors and officers.
GROUP'S POLICY ON PAYMENT OF CREDITORS
It is the Group's normal practice to make payments to suppliers in accordance
with agreed terms provided that the supplier has performed in accordance with
the relevant terms and conditions.
EMPLOYEE INVOLVEMENT
The Group places considerable value on the involvement of the employees and
has continued to keep them informed on matters affecting the Group. This is
achieved through formal and informal meetings.
GOING CONCERN
These financial statements have been prepared on the assumption that the Group
is a going concern. Further information is given in Note 2 of the financial
statements.
SIGNIFICANT EVENTS
(1) On 19 October 2022, MobilityOne Sdn Bhd ("M1 Malaysia")
entered into a share sale agreement (the "Share Sale Agreement") with Super
Apps Holdings Sdn Bhd ("Super Apps") for the disposal by M1 Malaysia of a 60%
shareholding in the Gorup's wholly-owned non-core subsidiary OneShop Retail
Sdn Bhd ("1Shop") to Super Apps (together the "Disposal"). Concurrently, M1
Malaysia entered into a joint venture cum shareholders agreement with Super
Apps and 1Shop (together the "Proposed Joint Venture"). The intention of the
Disposal and Proposed Joint Venture is to establish a new joint venture to
expand the Group's e-products and services business initially in Malaysia.
The Disposal was initially subject to the completion of a merger exercise
between Technology & Telecommunication Acquisition Corporation ("TETE")
and Super Apps which includes certain approvals by the United States
Securities and Exchange Commission ("SEC") (together the "Merger Exercise").
Subsequently it was announced on 1 March 2024 that M1 Malaysia entered into a
supplementary agreement with Super Apps to amend the terms and conditions of
the Share Sale Agreement in preparation for the Merger Exercise (the
"Supplementary Agreement"). Under the new terms and conditions of the
Supplementary Agreement, completion of the Disposal is no longer conditional
on the Merger Exercise completing. In this regard, it was instead agreed that
the Disposal completes upon entry of the Supplementary Agreement.
Notwithstanding completion, if the Merger Exercise does not complete, M1
Malaysia is entitled to purchase back the 60% interest in 1Shop from Super
Apps for a nominal consideration of RM1.00.
It was further agreed that irrespective of the completion of the Disposal and
subject to the completion of the Merger Exercise, Super Apps shall pay M1
Malaysia the following consideration:
(a) RM40.0 million (c. £7.53 million) in cash within 14 days upon completion
of the Merger Exercise; and
(b) RM20.0 million (c. £3.76 million) in cash within 180 days upon completion
of the Merger Exercise.
In addition, pursuant to the terms of the Proposed Joint Venture, M1 Malaysia
undertook to provide the necessary technical and business support to 1Shop and
guaranteed that 1Shop will achieve revenues of at least RM560.0 million in the
financial year ending 31 December 2023 or any other period as mutually agreed
("Revenue Target"). In consideration of M1 Malaysia guaranteeing the Revenue
Target, M1 Malaysia will be receiving the shares of TETE with aggregate value
of RM20.0 million following 1Shop achieving the Revenue Target. In the event
the Revenue Target is not met, M1 Malaysia will not receive the shares of TETE
and will not subject to any penalty.
Tete Technologies Inc, a wholly-owned subsidiary of TETE, has since filed a
draft proxy statement ("TETE Proxy Filing") with the SEC and the TETE Proxy
Filing is subject to the approval by the SEC. The Company will release further
announcements as and when appropriate.
It was announced by the Group on 18 June 2024 that the deadline to complete
the Merger Exercise was extended from 20 July 2024 to 20 January 2025. There
can be no guarantee that the payment for the consideration of the Disposal and
the Proposed Joint Venture can be completed as they are conditional on the
completion of the Merger Exercise, which is out of the Group's control. The
payment for the consideration of the Disposal and the completion of the
Proposed Joint Venture are expected to contribute positively to the financial
position and future growth of the Group.
(2) On 29 September 2023, M1 Malaysia entered into a share sale
agreement with United Flagship Development Sdn Bhd ("Vendor") to acquire a 49%
equity interest in Sincere Acres Sdn Bhd ("Sincere") for a total cash
consideration of RM30.0 million (c. £5.217 million) to be paid to the Vendor
in two tranches (the "Acquisition"). On 4 October 2023, the acquisition of
Hati International Sdn Bhd via Sincere completed and the first tranche,
representing RM2.0 million (c. £0.348 million), has since been paid to the
Vendor. The second tranche, representing the balance of RM28.0 million (c.
£4.869 million) (the "Second Tranche"), was originally required to be paid by
M1 Malaysia by 8 March 2024 (the "Second Tranche Payment Date").
On 8 March 2024, the Second Tranche Payment Date was extended until 8
September 2024 ("Extended Second Tranche Payment Date"). However, any payment
in relation to the Second Tranche made after the Second Tranche Payment Date
will be subject to an interest charge of 10% per annum. The balance amount
payable for the Second Tranche (including any interest charge) shall be
reduced by RM1.0 million (c. £0.174 million) when the payment is made by the
Extended Second Tranche Payment Date.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Directors' Report and
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have elected to prepare the
financial statements in accordance with International Financial Reporting
Standards (IFRS) as adopted for use in the European Union. Under Company law
the Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the
Company and the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the Directors are required to:
- select suitable accounting policies and then apply them
consistently;
- make judgments and estimates that are reasonable and prudent;
- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will continue in
business for the foreseeable future; and
- state that the financial statements comply with International
Financial Reporting Standards (IFRS) as adopted by the European Union.
The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Company and the Group and to enable them to ensure that the financial
statements comply with the requirements of the Companies (Jersey) Law 1991.
They are also responsible for safeguarding the assets of the Company and the
Group and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The Directors are responsible for the maintenance and the integrity of the
corporate and financial information included on the Group's website.
Information published on the website is accessible in many countries, and
legislation in Jersey and the relevant provisions of the AIM Rules for
Companies governing the preparation and dissemination of financial statements
may differ from legislation and the rules in other jurisdictions. The
Directors' responsibility also extends to the continued integrity of the
financial statements contained therein.
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the Directors are aware, there is no relevant audit information of
which the Company and Group's auditors are unaware, and each Director has
taken all the steps that he ought to have taken as a Director in order to make
himself aware of any relevant audit information and to establish that the
Company and Group's auditors are aware of that information.
AUDITORS
Gravita Audit Limited has indicated that it will seek re-appointment as the
Company's auditor at the forthcoming Annual General Meeting. A resolution to
re-appoint Gravita Audit Limited as the Company's auditor will be proposed at
the Annual General Meeting.
ON BEHALF OF THE BOARD:
............................................................................
Dato' Hussian @ Rizal bin A. Rahman
Chief Executive Officer
Date: 19 August 2024
Board of Directors
Abu Bakar bin Mohd Taib
(Non-Executive Chairman)
Abu Bakar bin Mohd Taib, a Malaysian aged 71, has been the Non-Executive
Chairman of the Company since 27 June 2014 and had previously worked for
several listed companies and financial institutions in Malaysia including
Nestle (Malaysia) Berhad, Bank Bumiputera Malaysia Berhad (now part of CIMB
Bank Berhad) and United Malayan Banking Berhad (now part of RHB Bank Berhad).
He was mainly involved in corporate communications and corporate affairs until
2004. Since 2005 he has been the director of several companies that are
principally involved in timber related activities in Malaysia. He obtained a
Master of Business Administration in Marketing and Finance from West Coast
University (USA) and a Bachelor of Science in Business Administration from
California State University (USA).
Dato' Hussian @ Rizal bin A. Rahman
(Chief Executive Officer)
Dato' Hussian @ Rizal bin A. Rahman, a Malaysian aged 62, is the Chief
Executive Officer of the Group. He has extensive experience in the IT and
telecommunications industries in Malaysia and is responsible for the
development of the Group's overall management, particularly in setting the
Group's business direction and strategies. He is currently also a
Non-Executive Director of TFP Solutions Berhad, which is listed on the ACE
Market of Bursa Malaysia Securities Berhad (Malaysia Stock Exchange). He
obtained a certified Master of Business Administration from the Oxford
Association of Management, England.
Derrick Chia Kah Wai
(Deputy Chief Executive Officer)
Derrick Chia Kah Wai, a Malaysian aged 53, is the Deputy Chief Executive
Officer of the Group. He began his career as a programmer in 1994, he then
joined GHL Systems Berhad in January 1998 as a Software Engineer and was
promoted to Software Development Manager in December 1999. He obtained his
Bachelor Degree in Commerce, majoring in Management Information System from
University of British Columbia, Canada. He joined the Group in May 2005 and is
responsible for the Group's business operations.
Seah Boon Chin
(Non-Executive Director)
Seah Boon Chin, a Malaysian aged 52, began his career in 1995 with a financial
institution in Malaysia and worked in the Corporate Finance Department of
several established financial institutions in Malaysia and Singapore. He
joined the Group in January 2007 and stepped down as the Corporate Finance
Director on 15 November 2011 and remains as a Non-Executive Director of the
Company. He is currently the Head of Corporate Finance with TA Securities
Holdings Berhad in Malaysia. He obtained his Bachelor Degree in Commerce
(Honours) with Distinction from McMaster University, Canada.
Azlinda Ezrina binti Ariffin
(Non-Executive Director)
Azlinda Ezrina binti Ariffin, British by background and aged 55, is an
experienced UK-based corporate lawyer with over 25 years legal experience. She
is currently a consulting partner in the corporate team at Withersworldwide
and was previously a partner in the capital markets teams at both Olswang LLP
and Fasken Martineau LLP, prior to joining Withersworldwide in 2016. Azlinda
specialises in mergers and acquisitions and equity capital markets
transactions. Azlinda is a member of both the Law Society of England &
Wales and the Malaysian Bar. She is also a barrister and member of Gray's Inn.
Corporate Governance Report
The Directors recognise the importance of good corporate governance and have
adopted the Quoted Companies Alliance ("QCA") Corporate Governance Code, 2018
("QCA Code") in line with the AIM Rules for Companies ("AIM Rules")
requirements that all AIM quoted companies adopt and comply with a recognised
corporate governance code. The Directors consider that the Company complies
with the QCA Code so far as is practicable. The QCA has launched an updated
version of its corporate governance code, 2023 ("2023 QCA Code") which applies
to the financial year after 1 April 2024. While the Directors have not
adopted the 2023 QCA Code, they will do so for the financial year after 1
April 2024.
The QCA Code identifies 10 principles that focus on the pursuit of medium to
long term value for shareholders. The following report sets out in broad
terms how the Company currently complies with the QCA Code.
1. Establish a strategy and business model which promote long-term
value for shareholders
The Group's strategy and business model are developed by the Chief Executive
Officer ("CEO") and approved by the Board, whenever required. The management
team, led by the CEO, is responsible for implementing the strategy.
Over the years, the Group has developed its core competencies in providing a
bridge between the service providers to their end consumers using the Group's
technology to accept transactions via multiple channels either via mobile
phones, Internet, electronic data capture terminals and even via banking
channels like Internet banking portal, automated teller machines (ATM) and
mobile banking.
Even though the e-payment business in Malaysia, particularly prepaid airtime
reload and bill payment business, is contributing substantially to the Group's
revenue, the Group continues to explore other business opportunities in
Malaysia and other countries to enhance its product offering for future
growth.
The key risks and uncertainties to the business model and strategy are
detailed in the Report of the Directors of the Company's Accounts for the year
ended 31 December 2023.
2. Seek to understand and meet shareholder needs and expectations
The Company encourages two-way communication with its shareholders to
understand their needs and expectations.
The Board recognises the annual general meeting ("AGM") as an important
opportunity to meet shareholders. The AGM is the main forum for dialogue with
shareholders and all members of the Board attend the AGM and are available to
answer questions raised by shareholders and to listen to views of
shareholders.
It should be noted that the CEO holds 50.3% of the Company's share capital and
talks to some of the Company's non-board shareholders to understand their
needs and expectations.
In the future should voting decisions not be in line with the Company's
expectations, the Board would endeavour to engage with those shareholders to
understand and address any issues.
Contact details are provided on the contacts page of the Company's website and
within public documents should shareholders wish to communicate with the
Company.
3. Take into account wider stakeholder and social responsibilities
and their implications for long-term success
The Group is aware of its corporate social responsibilities and the need to
maintain good relationships across a range of stakeholder groups, including
employees, business partners, suppliers, customers and regulatory authorities.
The Group's operations and working environment take into account the needs of
all stakeholder groups while maintaining focus on the responsibility to
promote the success of the Group. The Group encourages feedback from all
stakeholder groups as the Group's long term strategy is to create shareholder
value.
The Group places considerable value on the involvement of employees and
continues to keep them informed on matters affecting the Group through formal
and informal meetings which provide opportunities to received feedback on
issues affecting the Group.
The Group's activities are reliant on maintaining good relationships with a
number of banking partners in Malaysia. In addition the Group's remittance
business requires certain licences from the Central Bank of Malaysia and the
CEO maintains a good flow of communication with the Central Bank of Malaysia
to ensure the Group's activities continue to operate under the correct
regulatory framework.
4. Embed effective risk management, considering both opportunities
and threats, throughout the organisation
The principal risks and uncertainties affecting the business are set in the
Report of the Directors of the Company's Accounts for the year ended 31
December 2023.
The Board monitors these risks, which include technological, regulatory and
commercial risks, on a regular basis and the risks are considered by the Group
during Board meetings. The Executive Directors and senior management team meet
regularly during the year to review and evaluate risks and opportunities. The
senior management meets regularly to review ongoing trading performance and
any new risks associated with ongoing trading.
Risk identification can come from several sources: employees or other
stakeholder feedback; executive meetings; and decisions taken at Audit
Committee and Board meetings.
5. Maintain the board as a well- functioning, balanced team led by
the chair
The Board comprises two Executive Directors and three Non-Executive Directors.
All of the Non-Executive Directors are members of the audit, remuneration and
nomination committees and have the necessary skills and knowledge to discharge
their duties and responsibilities.
The Non-executive Chairman is responsible for the running of the Board and the
CEO has main executive responsibility for running the Group's business and
implementing the Group's strategy.
Both the Chairman and Azlinda Ezrina binti Ariffin are considered by the Board
to be independent. Seah Boon Chin is not deemed to be independent due to
having previously been an executive board member and his length of tenure.
Notwithstanding this, the Board considers that Seah Boon Chin brings an
independent judgement to bear notwithstanding the aforementioned
considerations.
The Directors receive regular updates on the Group's operational and financial
performance during Board meetings and they have committed sufficient time to
fulfill their responsibilities.
The Company believes it has effective procedures in place to monitor and deal
with conflicts of interest. In particular the Board is aware of the other time
commitments and interests of the CEO. Significant changes to these commitments
and interests are reported to and, where appropriate, agreed with the rest of
the Board.
In addition to the numerous written Board resolutions approved by the Board
which have the same force and effect as if adopted at duly convened meetings
of all the Directors, the Company had six Board meetings in 2023 which were
attended by all the Directors in office at the time of each board meeting.
6. Ensure that between them the directors have the necessary
up-to-date experience, skills and capabilities
The Directors' biographies are set out in the section "Board of Directors" of
the Company's Accounts for the year ended 31 December 2023.
The Board is satisfied that between the Directors, they have sufficient
skills, experience and capabilities to enable the strategy of the Company to
be delivered.
The Nomination Committee will make recommendations to the Board on all new
Board appointments. Where new Board appointments are considered the search for
candidates is conducted, and appointments are made, on merit, against
objective criteria.
The Board, if required, will review the composition of the Board to ensure
that it has the necessary diversity of skills to support the ongoing
development of the Group. Gender diversity is not in the Company's immediate
plans.
All Directors retire by rotation at regular intervals (every 3 years) in
accordance with the Company's Articles of Association.
The Directors attend courses and seminars to keep their skill set up to date.
7. Evaluate board performance based on clear and relevant
objectives, seeking continuous improvement
The Directors undergo a performance evaluation before being proposed for
re-election to ensure that they continue to be effective and committed to the
role. All Directors meet to discuss the performance evaluation together.
Appraisals are carried out each year with all Executive Directors.
The Board considers that the size of the Company does not justify the use of
third parties to evaluate the performance of the Board on an annual basis.
All Directors retire by rotation at regular intervals (every 3 years) and
stand for re-election at the AGM. During the year the Non-executive Directors
are responsible for informally reviewing Directors' performance and
highlighting any issues identified.
At the present time, succession planning is not in the Company's immediate
plans, however the Board will monitor the need to implement an informal or
formal succession plan going forward.
8. Promote a corporate culture that is based on ethical values and
behaviours
The Group maintains a high standard of integrity in the conduct of its
operations and is committed to providing a safe and healthy working
environment for its employees. The Group operates a corporate culture that is
based on ethical values and behaviours.
In addition, the Group encourages an open culture, with regular discussions
with employees regarding their performance and skills development to achieve
the objectives and strategy of the Group.
Any recommendations from staff to improve the working environment or in
respect of health and safety matters will be assessed by the Human Resources
and Administration Manager and, as appropriate, proposed to the Board for
necessary actions to be taken.
Given the size of the Group, all practices undertaken by the Group are
reviewed by the Executive Directors to ensure that the ethical values and
behaviours are being adhered to.
9. Maintain governance structures and processes that are fit for
purpose and support good decision- making by the board
The Board has overall responsibility for promoting the success of the Group.
The Executive Directors have day-to-day responsibility for the operational
management of the Group's activities. The Non-executive Directors are
responsible for bringing independent and objective judgement to Board
decisions.
There is a clear separation of the roles of CEO and Non-executive Chairman.
The Chairman is responsible for overseeing the running of the Board, ensuring
that no individual or group dominates the Board's decision-making and ensuring
the Non-executive Directors are properly briefed on matters. The Chairman has
overall responsibility for corporate governance matters in the Group. The CEO
has the responsibility for implementing the strategy of the Board and managing
the day-to-day business activities of the Group.
The Board has established the following committees: Audit Committee,
Remuneration Committee and Nomination Committee. The members of the three
committees are all the three Non-executive Directors. Abu Bakar bin Mohd Taib
chairs the Audit Committee, Remuneration Committee and Nomination Committee.
The Audit Committee normally meets at least once a year and has responsibility
for, amongst other things, planning and reviewing the annual report and
accounts and interim statements. It is also responsible for ensuring that an
effective system of internal control is maintained. The ultimate
responsibility for reviewing and approving the annual financial statements and
interim statements remains with the Board.
The Remuneration Committee meets at least once a year and has responsibility
for making recommendations to the Board on matter such as the remuneration
packages for each of the Directors.
The Nomination Committee, which meets as required, has responsibility for
reviewing the size and composition of the Board, the appointment of
replacement or additional Directors and making appropriate recommendations to
the Board. The Nominations Committee did not meet in the year.
The Directors consider that the Group has an appropriate governance framework
for its size now and as it grows but they will consider the evolution of this
framework on an annual basis.
The Board does not maintain a formal schedule of matters reserved for Board
decision but matters such as financial results, Board appointments and
acquisitions require approval at Company's Board meetings or written Board
resolutions approved by the Board which have the same force and effect as if
adopted at duly convened meetings of all the Directors. In 2023, the Company
held six Board meetings.
Board and committee meetings
Attendances of Directors at Board and committee meetings convened in 2023 are
set out below:
Audit Committee Meeting Attended Remuneration Committee Meeting Attended
Board Meetings Attended
Number of meetings in year 6 2 2
Abu Bakar bin Mohd Taib 6 2 2
Dato' Hussian @ Rizal bin A. Rahman 6 N/A N/A
Derrick Chia Kah Wai 6 N/A N/A
Seah Boon Chin 6 2 2
Azlinda Ezrina Binti Ariffin 6 2 2
10. Communicate how the company is governed and is performing by
maintaining a dialogue with shareholders and other relevant stakeholders.
The Company encourages two-way communication with various stakeholder groups,
including shareholders and responds quickly to their relevant queries.
The Directors recognise the AGM as an important opportunity to meet
shareholders and the Directors are available to answer questions raised by the
shareholders.
The Company's website is regularly updated to include business progress,
financial performance and corporate actions reflecting information that has
already been announced by the Company through regulatory announcements.
The Company will announce and post on its website the results of voting on all
resolutions in the general meetings (including annual general meetings)
including any actions to be taken as a result of resolutions for which votes
against have been received from at least 20 per cent. of independent
shareholders.
Under AIM Rule 26, the Company already publishes historical annual reports,
notices of meetings and other publications over the last five years which can
be found here: http://www.mobilityone.com.my/v4/annual-reports.html
(http://www.mobilityone.com.my/v4/annual-reports.html)
The Company has not published an audit committee or remuneration committee
report in its annual report and accounts. The Board feels that this is
appropriate given the size and stage of development of the Group. The Board
will consider annually whether it considers it appropriate for these reports
to be included in future annual report and accounts.
Report of the Independent Auditor to the Members of MobilityOne Limited
Opinion
We have audited the financial statements of MobilityOne Limited ('the
Company') and its subsidiaries (together 'the Group'), which comprise the
Consolidated Income Statement, the Consolidated Statement of Comprehensive
Income, the Consolidated Statement of Changes in Equity, the Company Statement
of Changes in Equity, the Consolidated Statement of Financial Position, the
Company Statement of Financial Position, the Consolidated Statement of Cash
Flows, the Company Statement of Cash Flows and the Notes to the financial
statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in the preparation of
the Group financial statements is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union. The financial
reporting framework that has been applied in the preparation of the Company
financial statements is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union.
In our opinion:
• the financial statements give a true and fair view of the state of
the Group's and of the Company's affairs as at 31 December 2023 and of the
Group's loss for the year then ended;
• the Group financial statements have been properly prepared in
accordance with International Financial Reporting Standards (IFRSs) as adopted
by the European Union;
• the Company financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union and as applied in
accordance with the requirements and provisions of Companies (Jersey) Law
1991; and
• the financial statements have been prepared in accordance with the
requirements of the Companies (Jersey) Law 1991.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the Group in accordance with the International Ethics Standards Board for
Accountants' Code of Ethics for Professional Accountants (IESBA Code) and
ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC's Ethical Standard as applied to
listed entities. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Our approach to the audit
We tailored the scope of our audit work to ensure we obtained sufficient
evidence to support our opinion on the financial statements as a whole, taking
into account the structure of the Group and the Company, the accounting
processes and controls and the industry in which the Group operates.
As Group auditor we carried out the audit of the Company financial statements
and, in accordance with ISA (UK) 600, obtained sufficient appropriate evidence
regarding the audit of the Group's significant components.
The Group financial statements consolidate the Company and eleven
subsidiaries. The subsidiaries are legal entities incorporated in Malaysia,
Brunei and the Philippines. The Group financial statements also equity
account for an associate, Sincere Acres Sdn Bhd, a company registered in
Malaysia. The associate represents a subgroup of the associate and its four
subsidiaries.
We determined MobilityOne Sdn Bhd, One Tranzact Sdn Bhd, OneTransfer
Remittance Sdn Bhd and Sincere Acres Sdn Bhd to be significant components due
to their relative contribution to the results and balances reported in the
Group financial statements. The Group engagement team directed, supervised
and reviewed the work of the component auditors in Malaysia who performed a
full scope audit of the significant components. This involved issuing detailed
instructions, holding video calls and performing a review of audit working
papers. The scope of audit work in respect of Sincere Acres Bhd Sdn, the
Group's associate, included testing of that component's statement of financial
position as at the date that the Group gained significant influence.
Collectively, the significant components represent over 99% of Group revenue
and over 99% of Group assets.
Audit work on the significant components was performed at component
materiality levels ranging from £22,000 to £90,000, lower than Group
materiality (2022: £5,000 to £130,000). Certain components were audited to
a local statutory audit materiality that was lower than component materiality.
As part of designing our audit, we determined materiality and assessed the
risks of material misstatement in the financial statements. In particular,
we looked at where the Directors made subjective judgements, for example in
respect of significant accounting estimates that involved making assumptions
and considering future events that are inherently uncertain. We also
addressed the risk of management override of internal controls, including
evaluating whether there was evidence of bias by the directors that
represented a risk of material misstatement.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the consolidated financial statements of
the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on the overall audit strategy, the allocation of
resources in the audit and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. This is not a complete list of
all risks identified by our audit.
Key audit matter How our audit addressed the key audit matter
Revenue recognition
The Group recorded significant revenue from the sale of prepaid mobile credit, Our audit work included:
representing over 99% of consolidated revenue. Total revenue recognised in
the year was £241.7m (2022: £233.8m).
- Gaining an understanding of the control environment in which
revenue accounting is undertaken;
In light of the significance of revenue to the Group financial statements, we
considered revenue recognition to be a Key Audit Matter. - Performing a walkthrough of key controls associated with revenue
accounting;
- Obtaining and reviewing management's revenue recognition policy
by reference to IFRS 15;
- Challenging management on their determination of whether the
Group acts as principal or agent in the sale of prepaid mobile credit;
- Reviewing the work of an auditor's expert in respect of the
General IT Control environment;
- Performing a significant sample of substantive tests of revenue;
- Reviewing revenue recognition by reference to the performance
obligations in the underlying revenue contracts.
We concluded that revenue recognition is satisfactory and in line with the
Group's accounting policy.
Key audit matter How our audit addressed the key audit matter
Investment in associate
On 4 October 2023, the Group acquired a 49% interest in Sincere Acres Sdn Bhd, Our audit work included:
the parent company of a Malaysian group of companies involved in medical
technologies including HATI International Sdn Bhd, for total consideration of
£5.1m.
- Obtaining and reviewing the underlying share purchase agreement
to understand the effective date of the acquisition and the key terms and
conditions;
Management determined that the facts and circumstances of the resulting
relationship represented significant influence and not control. The - Challenging management on their assessment of factors which
investment is therefore equity accounted as an associate in line with IAS 28. might indicate that the Group has control over the investee;
- Checking the appropriateness of the accounting treatment of
deferred consideration by reference to the acquisition agreement;
As a result, the Group recognised a share of loss of associate of £0.1m in
the year in respect of the period from 4 October 2023 to 31 December 2023. - Discussion with the management of MobilityOne and Sincere Acres
In light of the reported loss, management performed an impairment assessment to understand the commercial rationale for the investment and the future plans
and determined that no impairment was required in light of the projected cash of the Sincere Acres group;
flows within the Sincere Acres group.
- Challenging management on their interpretation of the nature of
the excess consideration over net assets at purchase date;
Given the significance of both the investment in the consolidated statement of - Reviewing the basis on which management determined that no
financial position and the potential impact of various judgements associated impairment of its net investment in the associate was required;
with the investment, we determined the Group's investment in Sincere Acres to
be a Key Audit Matter. - Examining the suitability of disclosures associated with the
investment in associate.
We determined that the investment in associate is fairly stated in line with
the Group's accounting policy.
Our application of materiality
The scope of our audit was influenced by our application of materiality. We
set certain quantitative thresholds for materiality. These, together with
qualitative considerations, helped us to determine the scope of our audit and
the nature, timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements
as a whole.
Based on our professional judgment, we determined materiality for the
financial statements as a whole as follows:
Group Company
Overall materiality £130,000 (2022: £191,000) £40,000 (2022: £9,000)
How we determined it 1.2% of gross profit 2% of gross assets
(2022: 1.5% of gross profit)
(2022: 5% of profit before tax)
Rationale for benchmark applied We believe that gross profit is a principal measure used by the members in As a holding company with no trade and one material asset, being an investment
assessing the trading performance of the Group and is therefore the in subsidiary, we determined that gross assets were the most appropriate
appropriate benchmark. benchmark against which to determine materiality. This is a change from the
prior period when 5% of profit before tax was used. We consider the change
in approach better represents the financial reporting risks of the entity.
We set performance materiality at an amount less than materiality for the
financial statements as a whole to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements
exceed materiality for the financial statement as a whole. Performance
materiality was set at £91,000 and £28,000 for the Group and Company
respectively (2022: £143,250 and £6,750).
We agreed with the Audit Committee that we would report to them misstatements
identified during our audit above £6,500 (2022: £10,000) as well as
misstatements below those amounts that, in our view, warranted reporting for
qualitative reasons.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors'
use of the going concern basis of accounting in the preparation of the
financial statement is appropriate.
Our evaluation of the Directors' assessment of the entity's ability to
continue to adopt the going concern basis of accounting included, as part of
our risk assessment, review of the nature of the business of the Group and
Company, its business model, the requirements of the applicable financial
reporting framework and the system of internal control. We evaluated the
Directors' assessment of the Group's and the Company's ability to continue as
a going concern, including challenging the underlying data and key assumptions
used to make the assessment, and evaluated the directors' plans for future
actions in relation to their going concern assessment. We challenged
management on the potential cash flow forecasts in scenarios in which the TETE
Merger occurs during the review period and also where it does not.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Group's and Company's ability
to continue as a going concern for a period of at least twelve months from
when the financial statements are authorised for issue. However, because not
all future events or conditions can be predicted this statement is not a
guarantee as to the Group's or Company's ability to continue as a going
concern.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
Directors are responsible for the other information contained within the
annual report. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise appears to be
materially misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material misstatement
of the other information. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Matters on which we are required to report by exception by the Companies
(Jersey) Law 1991
In the light of the knowledge and understanding of the Group and Company and
its environment obtained in the course of the audit, we have not identified
material misstatements in the directors' report.
We have nothing to report in respect of the following matters in relation to
which the Companies (Jersey) Law 1991 Article 113B (3) requires us to report
to you if, in our opinion:
• proper accounting records have not been kept by the Company, or
returns adequate for our audit have not been received from branches not
visited by us; or
• we have not received all the information and explanations we
require for our audit; or
• the Group and Company financial statements are not in agreement
with the accounting records and returns.
Responsibilities of Directors for the Group Financial Statements
As explained more fully in the directors' responsibilities statement, the
Directors are responsible for the preparation and fair presentation of the
Group financial statements in accordance with IFRS, and for such internal
control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the consolidated financial statements, the Directors are
responsible for assessing the Group's and the Company's ability to continue as
a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the Directors either
intend to liquidate the Group or the Company or to cease operations, or have
no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group's
financial reporting process.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the
consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor's report
that includes our opinion. Reasonable assurance is a high level of assurance
but is not a guarantee that an audit conducted in accordance with ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
The extent to which the audit was considered capable of detecting
irregularities including fraud
Our approach to identifying and assessing the risks of material misstatement
in respect of irregularities, including fraud and non-compliance with laws and
regulations, was as follows:
· the senior statutory auditor ensured the engagement team collectively
had the appropriate competence, capabilities and skills to identify or
recognise non-compliance with applicable laws and regulations.
· we identified the laws and regulations applicable to the group
through discussions with directors and other management.
· we focused on specific laws and regulations which we considered may
have a direct material effect on the financial statements or the operations of
the Group and Company, including company law and taxation legislation in
Malaysia.
· we assessed the extent of compliance with the laws and regulations
identified above through making enquiries of management and inspecting legal
correspondence.
· identified laws and regulations were communicated within the audit
team regularly and the team remained alert to instances of non-compliance
throughout the audit; and
· we assessed the susceptibility of the Group financial statements to
material misstatement, including obtaining an understanding of how fraud might
occur, by:
o making enquiries of management as to where they considered there was
susceptibility to fraud, their knowledge of actual, suspected and alleged
fraud; and
o considering the internal controls in place to mitigate risks of fraud and
non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls,
we:
· performed analytical procedures to identify any unusual or unexpected
relationships;
· tested journal entries to identify unusual transactions;
· assessed whether judgements and assumptions made in determining the
accounting estimates set out in the Group financial statements were indicative
of potential bias;
· investigated the rationale behind significant or unusual
transactions; and
· in response to the risk of irregularities and non-compliance with
laws and regulations, we designed procedures which included, but were not
limited to:
o agreeing financial statement disclosures to underlying supporting
documentation;
o reading the minutes of meetings of those charged with governance;
o enquiring of management as to actual and potential litigation and claims;
and
o reviewing correspondence with local tax authorities and the Group's legal
advisors.
There are inherent limitations in our audit procedures described above. The
more removed laws and regulations are from financial transactions, the less
likely it is that we would become aware of noncompliance. Auditing standards
also limit the audit procedures required to identify non-compliance with laws
and regulations to enquiry of the directors and other management and the
inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than
those that arise from error as they may involve deliberate concealment or
collusion.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
http://www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms part
of our auditor's report.
Use of this report
This report is made solely to the company's members, as a body, in accordance
with Article 113A of the Companies (Jersey) Law 1991. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company's members as a
body, for our audit work, for this report, or for the opinions we have formed.
Joseph Brewer
For and on behalf of Gravita Audit Limited (Statutory Auditor)
Aldgate Tower
2 Leman Street
London
EC1 8FA
19 August 2024
Consolidated Income Statement
For the year ended 31 December 2023
2023 2022
Note £ £
Revenue 5 241,673,952 233,761,671
Cost of sales (229,742,340) (221,010,827)
GROSS PROFIT 11,931,612 12,750,844
Other operating income 136,872 145,674
Administration expenses (12,547,017) (11,940,311)
Other operating expenses (220,895) (304,196)
Net loss on financial instruments 15 (351,387) (273,642)
OPERATING (LOSS)/PROFIT (1,050,815) 378,369
Finance income 41,033 37,752
Finance costs 6 (236,058) (137,143)
Share of post-tax loss of equity accounted
associates 16 (123,774) -
(LOSS)/PROFIT BEFORE TAX 7 (1,369,614) 278,978
Tax 8 (38,518) (262,350)
(LOSS)/PROFIT FROM CONTINUING
OPERATIONS (1,408,132) 16,628
(LOSS)/PROFIT (1,408,132) 16,628
Attributable to:
Owners of the parent (1,408,482) 23,857
Non-controlling interests 350 (7,229)
(1,408,132) 16,628
(LOSS)/PROFIT PER SHARE
Basic earnings per share (pence) 10 (1.325) 0.022
Diluted earnings per share (pence) 10 (1.325) 0.021
The notes form part of these financial statements
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2023
2023 2022
£ £
(LOSS)/PROFIT FOR THE YEAR (1,408,132) 16,628
OTHER COMPREHENSIVE (LOSS)/PROFIT
Items that are or may be reclassified subsequently to profit or loss
Foreign currency translation (542,104) 354,322
TOTAL COMPREHENSIVE (LOSS)/PROFIT (1,950,236) 370,950
Total comprehensive (loss)/profit attributable to:
Owners of the parent (1,952,013) 378,832
Non-controlling interests 1,777 (7,882)
(1,950,236) 370,950
The notes form part of these financial statements
Consolidated Statement of Changes in Equity
For The Year Ended 31 December 2023
Attributable to Owners of the Parent
Non-Distributable Distributable
Foreign
Reverse Currency Non-
Share Share Acquisition Translation Accumulated controlling Total
Capital Premium Reserve Reserve Losses Total Interests Equity
£ £ £ £ £ £ £ £
At 1 January 2023 2,657,470 909,472 708,951 1,047,682 (93,766) 5,229,809 (15,111) 5,214,698
Comprehensive income
Loss for the year - - - - (1,408,482) (1,408,482) 350 (1,408,132)
Foreign currency translation - - - (543,531) - (543,531) 1,427 (542,104)
Total comprehensive income
for the year - - - (543,531) (1,408,482) (1,952,013) 1,777 (1,950,236)
At 31 December 2023 2,657,470 909,472 708,951 504,151 (1,502,248) 3,277,796 (13,334) 3,264,462
The notes form part of these financial statements
Consolidated Statement Of Changes in Equity (continued)
For The Year Ended 31 December 2023
Attributable to Owners of the Parent
Non-Distributable Distributable
Foreign
Reverse Currency Non-
Share Share Acquisition Reserve Translation Reserve Accumulated Losses controlling Total
Capital Premium Total Interests Equity
£ £ £ £ £ £ £ £
At 1 January 2022 2,657,470 909,472 708,951 692,707 (117,623) 4,850,977 (7,229) 4,843,748
Comprehensive profit
Profit for the year - - - - 23,857 23,857 (7,229) 16,628
Foreign currency translation - - - 354,975 - 354,975 (653) 354,322
Total comprehensive profit for the year
- - - 354,975 23,857 378,832 (7,882) 370,950
At 31 December 2022 2,657,470 909,472 708,951 1,047,682 (93,766) 5,229,809 (15,111) 5,214,698
Share capital is the amount subscribed for shares at nominal value.
Share premium represents the excess of the amount subscribed for share capital
over the nominal value of the respective shares net of share issue expenses.
The reverse acquisition reserve relates to the adjustment required by
accounting for the reverse acquisition in accordance with IFRS 3.
The Company's assets and liabilities stated in the Statement of Financial
Position were translated into Pound Sterling (£) using the closing rate as at
the Statement of Financial Position date and the Income Statements were
translated into £ using the average rate for that period. All resulting
exchange differences are taken to the foreign currency translation reserve
within equity.
Accumulated losses represent the cumulative earnings of the Group attributable
to equity shareholders.
Non-controlling interests represent the share of ownership of subsidiary
companies held outside the Group.
The notes form part of these financial statements
Consolidated Statement of Financial Position
As at 31 December 2023
Restated
2023 2022
Note £ £
ASSETS
Non-current assets
Intangible assets 11 567,823 214,180
Property, plant and equipment 12 544,033 839,069
Investment property 13 250,102 283,125
Right-of-use assets 14 154,755 182,935
Trade and other receivables 15 258,428 228,050
Investment in associate 16 5,010,284 -
Other investment 11,116 12,281
6,796,541 1,759,640
Current assets
Inventories 17 1,912,675 3,189,901
Trade and other receivables 15 2,688,902 2,179,785
Other financial assets 18 600,694 652,206
Tax recoverable 163,452 183,321
Cash and cash equivalents 19 3,536,135 4,362,966
8,901,858 10,568,179
TOTAL ASSETS 15,698,399 12,327,819
SHAREHOLDERS' EQUITY
Equity attributable to owners of the parent:
Called up share capital 20 2,657,470 2,657,470
Share premium 21 909,472 909,472
Reverse acquisition reserve 22 708,951 708,951
Foreign currency translation reserve 23 504,151 1,047,682
Accumulated losses 24 (1,502,248) (93,766)
Shareholders' equity 3,277,796 5,229,809
Non-controlling interests (13,334) (15,111)
TOTAL EQUITY 3,264,462 5,214,698
2023 2022
Note £ £
LIABILITIES
Non-current liabilities
Loans and borrowings - secured 25 189,428 221,697
Lease liabilities 14 101,465 98,450
Deferred tax liabilities 46,066 15,484
336,959 335,631
Current liabilities
Trade and other payables 26 3,169,711 2,947,056
Deferred consideration due 16 4,788,453 -
Amount due to Directors 27 35,300 66,855
Loans and borrowings - secured 25 4,036,396 3,647,482
Lease liabilities 14 65,372 105,316
Tax payables 1,746 10,781
12,096,978 6,777,490
Total liabilities 12,433,937 7,113,121
TOTAL EQUITY AND LIABILITIES 15,698,399 12,327,819
The financial statements were approved and authorised by the Board of
Directors on 19 August 2024 and were signed on its behalf by:
............................................................................
Dato' Hussian @ Rizal bin A. Rahman
Chief Executive Officer
The notes form part of these financial statements
Consolidated Statement of Cash Flows
For the year ended 31 December 2023
Restated
2023 2022
Note £ £
Cash flow from operating activities
Cash flow from operations 29 213,934 (614,763)
Interest received 39,435 35,933
Tax paid (168,251) (421,991)
Tax refund 157,324 5,532
Net cash from/(used in) operating activities 242,442 (995,289)
Cash flow from investing activities
Purchase of property, plant and equipment 12 (47,092) (390,056)
Purchase of intangible assets (373,965) -
Addition in other investment - (12,281)
Addition to investments in associate (342,032) -
Proceeds from disposal of property, plant and equipment 2,018 8,465
Net cash used in investing activities (761,071) (393,872)
Cash flows from financing activities
Interest paid (236,058) (137,143)
Net change of banker acceptance 25 389,297 1,562,937
Net change in other financial assts pledged 51,512 (652,206)
Repayment of lease liabilities 14 (96,503) (111,144)
Repayment of term loan (11,617) (9,615)
Net cash from financing activities 96,631 652,829
(Decrease) in cash and cash equivalents (421,998) (736,332)
Effect of foreign exchange rate changes (404,833) 433,774
Cash and cash equivalents at beginning of year 4,362,966 4,665,524
Cash and cash equivalents at end of year 19 3,536,135 4,362,966
The notes form part of these financial statements
Notes to the Financial Statements
For the year ended 31 December 2023
1. GENERAL INFORMATION
The principal activity of the Company is investment holding. The principal
activities of the subsidiary companies are set out in Note 28 to the financial
statements. There were no significant changes in the nature of these
activities during the year.
The Company is incorporated in Jersey, the Channel Islands under the Companies
(Jersey) Law 1991. The registered office is located at 13 Castle Street, St
Helier, Jersey JE1 1ES, Channel Islands. The consolidated financial statements
for the year ended 31 December 2023 comprise the results of the Company and
its subsidiary companies. The Company's ordinary shares are traded on AIM of
the London Stock Exchange.
MobilityOne Limited is the holding company of an established group of
companies ("Group") based in Malaysia which is in the business of providing
e-commerce infrastructure payment solutions and platforms through their
proprietary technology solutions.
The Group has developed an end-to-end e-commerce solution which connects
various service providers across several industries such as banking,
telecommunication and transportation through multiple distribution devices
such as EDC terminals, short messaging services, Automated Teller Machine and
Internet banking.
The Group's technology platform is flexible, scalable and has been designed to
facilitate cash, debit card and credit card transactions (according to the
device) from multiple devices while controlling and monitoring the
distribution of different products and services.
2. ACCOUNTING POLICIES
Basis of preparation
These financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRSs and IFRIC interpretations) issued by the
International Accounting Standards Board (IASB), as adopted by the European
Union, and with those parts of the Companies (Jersey) Law 1991 applicable to
companies preparing their financial statements under IFRS. The financial
statements have been prepared under the historical cost convention.
Going Concern
The Group's business activities, together with the factors likely to affect
its future development, performance and position, are set out in Chairman's
statement on page 2. The financial position of the Group, its cash flows,
liquidity position and borrowing facilities are described in the financial
statements and associated notes. In addition, Note 3 to the financial
statements includes the Group's objectives, policies and processes for
managing its capital; its financial risk management objectives; details of its
financial instruments and hedging activities; and its exposures to credit risk
and liquidity risk.
In order to assess the going concern of the Group, the Directors have prepared
cashflow forecasts for companies within the Group. These cashflow forecasts
show the Group expect an increase in revenue and will have sufficient headroom
over available banking facilities. The Group has obtained banking facilities
sufficient to facilitate the growth forecast in future periods. No matters
have been drawn to the Directors' attention to suggest that future renewals
may not be forthcoming on acceptable terms.
Going Concern (continued)
In addition, the controlling shareholder has also undertaken to provide
support to enable the Group to meet its debts as and when they fall due.
The Group reported a loss after tax for the year of £1,408,132 (2022: profit
after tax of £16,628). Additionally, the Group's current liabilities of
£12,096,879 exceed current assets of £8,901,858 by £3,195,021. Therefore,
the Directors have carefully considered the impact of these metrics on the
ability of the Group and Company to continue as a going concern and hence
whether it remains appropriate for the financial statements to be prepared on
a going concern basis.
Whilst the Group reported a loss after tax, the Board notes that this loss
reflects a number of significant non-cash items. The Board notes that the
consolidated cash flow statement illustrates that the Group's operating
activities generated net cash of £242,442 in the year and that the cash
depletion seen during the year arose from investing activities, specifically
the Group's initial investment in Sincere Acres and its investment in new
technology represented by the development assets held at year end. The Board
carefully reviewed cash balances and projected cash requirements before
undertaking these investing activities since the return from investment
activities is likely to arise over a period of years. The Board is satisfied
that appropriate monitoring was applied to liquidity rise where performing an
assessment of the economic and financial viability of a potential investment
project.
In assessing the impact of the net current liability position, the Board notes
that this arises solely from the contractual arrangements entered into as part
of the acquisition of the Group's 49% interest in Sincere Acres. Under that
agreement, RM28 million (£4.8 million) remained payable as at 31 December
2023 in line with the terms of the acquisition. In the event the outstanding
consideration is not settled in cash, the Group intends to surrender its 49%
equity interest in Sincere Acres back to the vendor. As such, the Board
considers that in the event that insufficient funds are available to settle
the deferred consideration, the consideration will not be settled. The Group's
investment in Sincere Acres is not yet cash generative and so the
relinquishment of this asset would not impact the Group wider prospects of
conducting cash generative activity.
The Board has considered alternative going concern scenarios in order to
ensure a robust assessment is made. In the base case scenario, which the
Board considers is the most likely scenario, the TETE Merger described in
detail in Note 34, will proceed in the near term. Under the terms of the
Merger Exercise, the Group would receive RM40 million (£6.8 million) within
14 days of the completion date and a further RM20 million
(£3.4 million) within 180 days. Therefore, in the base case scenario, the
Group will generate free cash to settle the Sincere Acres consideration plus
additional cash to utilise in new projects and investment.
The Directors have also had regard to an alternative scenario in which the
TETE Merger exercise is delayed or does not complete in line with the Board's
expectation. Cash flow projections have been prepared in this downside
scenario to model the ability of the Group to continue to meet its obligations
as they fall due, including in a case whereby sales of prepay mobile credit
fall below expectations and other revenues generated by the Group do not grow
as expected. The Board has modelled a prudent scenario in which the
achievable gross margin is assumed to fall. It is noted that the Group
incurs a material proportion of costs which are directly related to the levels
of revenue generated such as the purchase of inventory and commissions
associated with the level of activity on the Group's or its partners'
platforms. Further, the Group has limited committed spend, unutilised
headroom in the facilities provided by its banking partners and a continuing
undertaking of support from its CEO. The Board further notes that whilst the
Group has been supported by short term debt products in recent years, the
option of an issue of shares on AIM is available, albeit the Board has no
current plan to seek a placing.
As noted in this Annual Report, a review has also been performed in respect of
the wider prospects of the Group in light of developments in the wider
Malaysian economy and note encouraging trends in economic growth, the
digitisation of economic activity and continuing growth in the value of
economic activity in the payments space in Malaysia and the wider region.
In light of the review performed and consideration of all factors, the Board
has concluded that it is appropriate to continue to present the financial
statements on a going concern basis and, that whilst the future is inherently
uncertain, the uncertainties associated with this assessment are sufficiently
mitigated through the initiatives and options available to the Board.
Estimation uncertainty and critical judgements
The significant areas of estimation uncertainty and critical judgements in
applying accounting policies that have the most significant effect on the
amount amortisation in the financial statements are as follows:
(i) Significant influence over Sincere Acres Sdn. Bhd.
Note 16 describes Sincere Acres Sdn. Bhd. which is an associate of the Group.
The Group has significant influence over Sincere Acres Sdn. Bhd. by virtue of
its 49% ownership interest in Sincere Acres Sdn. Bhd. Management considers
that there are no commercial, practical or legal factors which would be
indicative of the ability to control Sincere Acres. The Group's 49% equity
interest confers no enhanced rights above other shareholders and the Group has
no ability to direct the day to day operations of Sincere Acres.
(ii) Impairment of investment in associate
The Group and the Company review its investment in associate when there are
indicators of impairment. Impairment is measured by comparing the carrying
amount of an investment with its recoverable amount. Significant judgement is
required in determining the recoverable amount. Estimating the recoverable
amount requires the Group and the Company to make an estimate of the expected
future cash flows from the cash-generating units and also to determine a
suitable discount rate in order to calculate the present value of those cash
flows.
The associate reported a loss in the reporting period which was considered an
impairment indicator and so an impairment review was performed. This
involved an assessment of the associate's proven ability to win contracts in
the past, the extent and position of potential projects, a review of the
potential market for Hati's medtech products and the commercial prospects of
the business. In light of these factors it was determined that no impairment
was required.
(iii) Depreciation of property, plant and equipment
The costs of property, plant and equipment of the Group are depreciated on a
straight-line basis over the useful lives of the assets. Management estimates
the useful lives of the property, plant and equipment to be within 3 to 50
years. These are common life expectancies applied in the industry. Changes in
the expected level of usage and technological developments could impact the
economic useful lives and the residual values of these assets, therefore
future depreciation charges could be revised. The carrying amounts of the
Group's property, plant and equipment as at 31 December 2023 are disclosed in
Note 12 to the financial statements.
(iv) Amortisation of intangible assets
Software is amortised over its estimated useful life. Management estimated the
useful life of this asset to be 10 years. Changes in the expected level of
usage and technological development could impact the economic useful life
therefore future amortisation could be revised.
The research and development costs are amortised on a straight-line basis over
the life span of the developed assets. Management estimated the useful life of
these assets to be within 5 years. Changes in the technological developments
could impact the economic useful life and the residual values of these assets,
therefore future amortisation charges could be revised.
The carrying amounts of the Group's intangible assets as at 31 December 2023
are disclosed in Note 11 to the financial statements.
However, if the projected sales do not materialise there is a risk that the
value of the intangible assets shown above would be impaired.
(v) Impairment of goodwill on consolidation
The Group determines whether goodwill is impaired at least on an annual basis.
This requires an estimation of the value-in-use of the cash generating units
("CGU") to which goodwill is allocated. Estimating a value-in-use amount
requires management to make an estimation of the expected future cash flows
from the CGU and also to choose a suitable discount rate in order to calculate
the present value of those cash flows.
The relevant cash generating unit's cash flow projections include estimates of
future sales. However, if the projected sales do not materialise there is a
risk that the value of goodwill would be impaired.
The Directors have carried out a detailed impairment review in respect of
goodwill. The Group assesses at each reporting date whether there is an
indication that an asset may be impaired, by considering the cash flows
forecasts. The cash flow projections are based on the assumption that the
Group can realise projected sales. A prudent approach has been applied with no
terminal value being factored. At the period end, based on these assumptions,
there was indication of impairment of the value of goodwill.
The carrying amount of the Group's goodwill on consolidation as at 31 December
2023 is disclosed in the Note 11 to the financial statements.
(vi) Going concern
The Group determines whether it has sufficient resources in order to continue
its activities by reference to budget together with current and forecast
liquidity. This requires an estimate of the availability of such funding which
is critically dependent on external borrowings support from the majority
shareholders of the Group and, to an extent, macroeconomic factors.
(vii) Revenue Recognition -
Principal versus Agent considerations
The Company recognises revenue from contracts with customers when control of
the promised goods or services is transferred to the customer at an amount
that reflects the consideration to which the Company expects to be entitled in
exchange for those goods or services. The Company acts as a principal in
transactions where it is primarily responsible for fulfilling the promise to
provide goods or services to the customer. This determination is primarily
based on the inventory risk borne by the Group, as it holds and manages the
inventory before the transfer of control to the customer.
Revenue is recognized at the gross amount of consideration received or
receivable from customers for whom we are acting as a principal, net of any
sales taxes, duties, and rebates. The Company evaluates its role as principal
or agent in each transaction and applies judgment based on the specific facts
and circumstances of each contract.
(viii) Inventories valuation
Inventories are measured at the lower of cost and net realisable value. The
Company estimates the net realisable value of inventories based on an
assessment of expected sales prices. Demand levels and pricing competition
could change from time to time. If such factors result in an adverse effect on
the Group's products, the Group might be required to reduce the value of its
inventories. Details of inventories are disclosed in Note 17 to the financial
statements.
(ix) Income taxes
Judgement is involved in determining the provision for income taxes. There are
certain transactions and computations for which the ultimate tax determination
is uncertain during the ordinary course of business.
The Company recognises liabilities for expected tax issues based on estimates
of whether additional taxes will be due. Where the final tax outcome of these
matters is different from the amounts that were initially recognised, such
differences will impact the income tax and deferred tax provisions in the
period in which such determination is made. As at 31 December 2023, the Group
has tax recoverable of £163,452 (2022: £183,321).
IFRS AND IAS UPDATE FOR 31 DECEMBER 2023
ACCOUNTS
The impact of new IFRSs adopted during the year
During the current year, the Group adopted all new and revised standards and
interpretations issued by the International Accounting Standards Board and the
International Financial Reporting Interpretations Committee and that are
endorsed by the EU that are effective for annual accounting periods beginning
on 1 January 2023. None of them had a material impact on the group financial
statements.
- Disclosure of Accounting Policies (Amendments to IAS 1 and
IFRS Practice Statement 2)
The amendments to IAS 1 require companies to disclose their material
accounting policy information rather than their significant accounting
policies. The amendments to IFRS Practice Statement 2 provide guidance on how
to apply the concept of materiality to accounting policy disclosures.
- Definition of Accounting Estimates (Amendments to IAS 8)
The amendments clarify how companies should distinguish changes in accounting
policies from changes in accounting estimates. That distinction is important
because changes in accounting estimates are applied prospectively only to
future transactions and other future events, but changes in accounting
policies are generally also applied retrospectively to past transactions and
other past events.
- Deferred Tax Relating to Assets and Liabilities arising from a Single
Transaction (Amendments to
IAS 12)
IAS 12 specifies how a company accounts for income tax, including deferred
tax, which represents tax payable or recoverable in the future. In specified
circumstances, companies are exempt from recognising deferred tax when they
recognise assets or liabilities for the first time. The amendments clarify
that the exemption does not apply and that companies are required to recognise
deferred tax on such transactions.
Standards, interpretations and amendments to published standards that are not
yet effective
The following standards, amendments and interpretations applicable to the
Group are in issue but are not yet effective and have not been early adopted
in these financial statements. They may result in consequential changes to the
accounting policies and other note disclosures. We do not expect the impact of
such changes on the financial statements to be material. These are outlined in
the table below:
Effective dates for financial periods beginning on or after
Amendments to IFRS 16 Lease Liability in a Sale and Leaseback 1 January 2024
Amendments to IAS 1 Non-current Liabilities with Covenants 1 January 2024
Amendments to IAS 7 and IFRS 17 Supplier Finance Arrangements 1 January 2024
Amendments to IAS 12 The Effects of Changes in Foreign Exchange Rates - Lack of Exchangeability 1 January 2025
Amendments to IFRS 9 and IFRS 7 Amendments to the Classification and Measurement of Financial Instruments 1 January 2026
IFRS 18 Presentation and Disclosure in Financial Statements 1 January 2027
IFRS 19 Subsidiaries without Public Accountability Disclosures 1 January 2027
Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Deferred until further notice
Venture
The Directors anticipate that the adoption of these standards and the
interpretations in future periods will have no material impact on the
financial statements of the Group.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Company (its subsidiary companies)
made up to 31 December each year. Control is achieved where the Company has
the power to govern the financial and operating policies of an investee entity
so as to obtain benefits from its activities.
Transactions, balances and unrealised gains on transactions between Group
companies are eliminated. Unrealised losses are also eliminated but considered
an impairment indicator of the asset transferred. Accounting policies of its
subsidiary companies have been changed (where necessary) to ensure consistency
with the policies adopted by the Group.
(i) Subsidiary companies
Subsidiary companies are entities over which the Group has the ability to
control the financial and operating policies so as to obtain benefits from
their activities. The existence and effect of potential voting rights that are
currently exercisable or convertible are considered when assessing whether the
Group has such power over another entity.
In the Company's separate financial statements, investments in subsidiary
companies are stated at cost less impairment losses. On disposal of such
investments, the difference between net disposal proceeds and their carrying
amounts is included in profit or loss.
(ii) Basis of consolidation
On 22 June 2007 MobilityOne Limited acquired the entire issued share capital
of MobilityOne Sdn. Bhd. By way of a share for share exchange, under IFRS this
transaction meets the criteria of a Reverse Acquisition. The consolidated
accounts have therefore been presented under the Reverse Acquisition
Accounting principles of IFRS 3 and show comparatives for MobilityOne Sdn.
Bhd. For financial reporting purposes, MobilityOne Sdn. Bhd. (the legal
subsidiary company) is the acquirer and MobilityOne Limited (the legal parent
company) is the acquiree.
No goodwill has been recorded and the difference between the parent Company's
cost of investment and MobilityOne Sdn. Bhd.'s share capital and share premium
is presented as a reverse acquisition reserve within equity on consolidation.
The consolidated financial statements incorporate the financial statements of
the Company and all entities controlled by it after eliminating internal
transactions. Control is achieved where the Group has the power to govern the
financial and operating policies of a Group undertaking so as to obtain
economic benefits from its activities. Undertakings' results are adjusted,
where appropriate, to conform to Group accounting policies.
Subsidiary companies are consolidated from the date of acquisition, being the
date on which the Group obtains control, and continue to be consolidated until
the date that such control ceases. In preparing the consolidated financial
statements, intra-group balances, transactions and unrealised gains or losses
are eliminated in full. Uniform accounting policies are adopted in the
consolidated financial statements for like transactions and events in similar
circumstances.
The share capital in the consolidated statement of changes in equity for both
the current and comparative period uses a historic exchange rate to determine
the equity value.
As permitted by and in accordance with Article 105 of the Companies (Jersey)
Law 1991, a separate income statement of MobilityOne Limited, is not
presented.
Revenue recognition
Revenue is recognised when it is probable that economic benefits associated
with the transaction will flow to the Group and the amount of the revenue can
be measured reliably.
(i) Revenue from trading activities
Revenue in respect of using the Group's e-Channel platform arises from the
sales of prepaid credit, sales commissions received and fees per transaction
charged to customers. Revenue for sales of prepaid credit is deferred until
such time as the products and services are delivered to end users. The
delivery of products is typically immediately upon purchase and therefore
revenue is recorded at point in time, being the date of the underlying
customer's purchase of prepaid credit or the transaction giving rise to a
commission. Sales commissions and transaction fees are received from various
product and services providers and are recognised when the services are
rendered and transactions are completed.
Revenue from solution sales and consultancy comprise sales of software
solutions, hardware equipment, consultancy fees and maintenance and support
services. For sales of hardware equipment, revenue is recognised when the
significant risks associated with the equipment are transferred to customers
or the expiry of the right of return. For all other related sales, revenue is
recognised upon delivery to customers and over the period in which services
are expected to be provided to customers.
Revenue from remittance comprises transaction service fees charged to
customers/senders. Transaction fees are received from senders and are
recognised when the services are rendered and transactions are completed.
More than 95% of the Group's revenue for the financial ended 31 December 2023
was generated in Malaysia and none of the revenue was derived in the United
Kingdom or Channel Islands.
(ii) Interest income
Interest income on lending activities is recorded by reference to the
effective interest method. Where there has been a significant increase in
credit risk, interest is only recorded by reference to the net carrying value
of the receivable.
(iii) Rental income
Rental income is recognised on an accrual basis.
Employee benefits
(i) Short term employee benefits
Wages, salaries, bonuses and social security contributions are recognised as
an expense in the period in which the associated services are rendered by
employees of the Group. Short term accumulating compensated absences such as
paid annual leave are recognised when services are rendered by employees that
increase their entitlement to future compensation absences. Short term
non-accumulating compensated absences such as sick and medical leave are
recognised when the absences occur.
The expected cost of accumulating compensated absences is measured as the
additional amount expected to be paid as a result of the unused entitlement
that has accumulated at the Statement of Financial Position date.
(ii) Defined contribution plans
As required by law, companies in Malaysia make contributions to the state
pension scheme, the Employees Provident Fund ("EPF"). Such contributions are
recognised as an expense in the income statement in the period to which they
relate. The other subsidiary companies also make contribution to their
respective countries' statutory pension schemes.
Functional currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates (the functional currency). The functional currency of the
Group is Ringgit Malaysia (RM). The consolidated financial statements are
presented in Pound Sterling (£), which is the Company's presentational
currency as this is the currency used in the country in which the entity is
listed.
Assets and liabilities are translated into Pound Sterling (£) at foreign
exchange rates ruling at the Statement of Financial Position date. Results and
cash flows are translated into Pound Sterling (£) using average rates of
exchange for the period.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency
using exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions
and from the translation at year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the income
statement.
(iii) Transactions and balances (continued)
The financial
information set out below has been translated at the following rates:
Exchange rate (RM: £)
At Statement of Financial Position date
Average for year
Year ended 31 December 2023 5.85 5.68
Year ended 31 December 2022 5.29 5.43
Taxation
Taxation on the income statement for the financial period comprises current
and deferred tax. Current tax is the expected amount of taxes payable in
respect of the taxable profit for the financial period and is measured using
the tax rates that have been enacted at the Statement of Financial Position
date.
Deferred tax is recognised on the liability method for all temporary
differences between the carrying amount of an asset or liability in the
Statement of Financial Position and its tax base at the Statement of Financial
Position date. Deferred tax liabilities are recognised for all taxable
temporary differences and deferred tax assets are recognised for all
deductible temporary differences, unused tax losses and unused tax credits to
the extent that it is probable that future taxable profit will be available
against which the deductible temporary differences, unused tax losses and
unused tax credits can be recognised. Deferred tax is not recognised if the
temporary difference arises from goodwill or negative goodwill or from the
initial recognition of an asset or liability in a transaction which is not a
business combination and at the time of the transaction, affects neither
accounting profit nor taxable profit.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply to the period when the asset is recognised or the liability
is settled, based on the tax rates that have been enacted or substantively
enacted by the Statement of Financial Position date. The carrying amount of a
deferred tax asset is reviewed at each Statement of Financial Position date
and is reduced to the extent that it becomes probable that sufficient future
taxable profit will be available.
Deferred tax is recognised in the income statement, except when it arises from
a transaction which is recognised directly in equity, in which case the
deferred tax is also charged or credited directly in equity, or when it arises
from a business combination that is an acquisition, in which case the deferred
tax is included in the resulting goodwill or negative goodwill.
Intangible assets
(i) Research and development costs
All research costs are recognized in the income statement as incurred.
Expenditure incurred on projects to develop new products is recognised and
capitalised only when the Group can demonstrate the technical feasibility of
completing the intangible asset so that it will be available for use or sale,
its intention to complete and its ability to use or sell the asset, how the
asset will generate future economic benefits, the availability of resources to
complete the project and the ability to measure reliably the expenditure
during the development. Product development expenditures which do not meet
these criteria are expensed when incurred.
Development costs, considered to have finite useful lives, are stated at cost
less any impairment losses and are amortised through other operating expenses
in the income statement using the straight-line basis over the commercial
lives of the underlying products not exceeding five years. Impairment is
assessed whenever there is an indication of impairment and the amortisation
period and method are also reviewed at least at each Statement of Financial
Position date.
(ii) Goodwill on consolidation
Goodwill acquired in a business combination is initially measured at cost,
representing the excess of the purchase price over the Group's interest in the
net fair value of the identifiable assets, liabilities and contingent
liabilities.
Following the initial recognition, goodwill is measured at cost less
accumulated impairment losses. Goodwill is not amortised but instead, it is
reviewed for impairment annually or more frequent when there is objective
evidence that the carrying value may be impaired, in accordance with the
accounting policy disclosed in impairment of assets.
Gains or losses on the disposal of an entity include the carrying amount of
goodwill relating to the entity sold.
(iii) Software
Software which forms an integral part of the related hardware is capitalised
with that hardware and included within property, plant and equipment. Software
which are not an integral part of the related hardware are capitalised as
intangible assets.
Acquired computer software licenses are capitalised on the basis of the costs
incurred to acquired and bring to use the specific software. These costs are
amortised over their estimated useful life of 10 years.
Impairment of assets
The carrying amounts of assets are reviewed at each reporting date to
determine whether there is any indication of impairment.
If any such indication exists then the asset's recoverable amount is
estimated.
An impairment loss is recognized if the carrying amount of an asset or its
cash-generating unit exceeds its recoverable amount A cash-generating unit is
the smallest identifiable asset group that generates cash flows that are
largely independent from other assets and groups. Impairment losses are
recognized in the income statement in the period in which it arises.
Impairment losses recognised in respect of cash-generating units are allocated
first to reduce the carrying amount of any goodwill allocated to the units and
then to reduce the carrying amount of the other assets in the unit (group of
units) on a pro rata basis.
The recoverable amount of an asset or cash-generating unit is the greater of
its value in use and its fair value less costs to sell. In assessing value in
use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset.
Impairment loss on goodwill is not reversed in a subsequent period. An
impairment loss for an asset other than goodwill is reversed if, and only if,
there has been a change in the estimates used to determine the asset's
recoverable amount since the last impairment loss was recognised. The carrying
amount of an asset other than goodwill is increased to its revised recoverable
amount, provided that this amount does not exceed the carrying amount that
would have been determined (net of amortisation or depreciation) had no
impairment loss been recognized for the asset in prior years. A reversal of
impairment loss for an asset other than goodwill is recognized in the income
statement.
Property, plant and equipment
(a) Recognition and measurement
Property, plant and equipment are stated at cost less accumulated depreciation
and accumulated impairment losses.
Cost includes expenditures that are directly attributable to the acquisition
of the asset. The cost of self-constructed assets includes the cost of
materials and direct labour, any other costs directly attributable to bringing
the asset to working condition for its intended use, and the costs of
dismantling and removing the items and restoring the site on which they are
located. Purchased software that is integral to the functionality of the
related equipment is capitalised as part of that equipment.
When significant parts of an item of property, plant and equipment have
different useful lives, they are accounted for as separate items (major
components) of property, plant and equipment.
(b) Subsequent costs
The cost of replacing part of an item of property, plant and equipment is
recognised in the carrying amount of the item if it is probable that the
future economic benefits embodied within the part will flow to the Group and
its cost can be measured reliably. The costs of the day-to-day servicing of
property, plant and equipment are recognised in the income statement as
incurred.
(c) Depreciation
Depreciation is recognised in the income statement on a straight-line basis
over the estimated useful lives of property, plant and equipment. Leased
assets are depreciated over the shorter of the lease term and their useful
lives. Property, plant and equipment under construction are not depreciated
until the assets are ready for their intended use.
The estimated useful lives for the current and comparative periods are as
follows:
Motor vehicles 5 years
Leasehold improvement 10 years
Electronic Data Capture equipment 10 years
Computer equipment 3 to 5 years
Computer software 10 years
Furniture and fittings 10 years
Office equipment 10 years
Renovation 10 years
The depreciable amount is determined after deducting the residual value.
Depreciation methods, useful lives and residual values are reassessed at each
financial period end.
Upon disposal of an asset, the difference between the net disposal proceeds
and the carrying amount of the assets is charged or credited to the income
statement. On disposal of a revalued asset, the attributable revaluation
surplus remaining in the revaluation reserve is transferred to the
distribution reserve.
Investments
Investments in subsidiary companies are stated at cost less any provision for
impairment.
Inventories
Inventories are valued at the lower of cost and net realisable value and are
determined on the first-in-first-out method, after making due allowance for
obsolete and slow moving items. Net realisable value is based on estimated
selling price in the ordinary course of business less the costs of completion
and selling expenses.
Investment in associate
On acquisition of an investment in an associate, any excess of the cost of
investment over the Group's share of the net fair value of the identifiable
assets and liabilities of the investee is recognised as goodwill and included
in the carrying amount of the investment. Any excess of the Group's share of
the net fair value of the identifiable assets and liabilities of the investee
over the cost of investment is excluded from the carrying amount of the
investment and is instead included as income in the determination of the
Group's share of associate's or joint venture's profit or loss for the period
in which the investment is acquired.
An associate is accounted for using the equity method as described in IAS 28
from the date on which the investee becomes an associate. Under the equity
method, on initial recognition the investment in an associate is recognised at
cost, and the carrying amount is increased or decreased to recognise the
Group's share of profit or loss and other comprehensive income of the
associate after the date of acquisition. When the Group's share of losses in
an associate equals or exceeds its interest in the associate, the Group does
not recognise further losses, unless it has incurred legal or constructive
obligations or made payments on behalf of the associate.
Profits or losses resulting from upstream and downstream transactions between
the Group and its associate are recognised in the Group's consolidated
financial statements only to the extent of unrelated investors' interests in
the associate or joint venture. Unrealised losses are eliminated unless the
transaction provides evidence of an impairment of the assets transferred.
The financial statements of the associates are prepared as of the same
reporting date as the Company. Where necessary, adjustments are made to bring
the accounting policies in line with those of the Group.
The requirements of IAS 36 Impairment of Assets are applied to determine
whether it is necessary to recognise any additional impairment loss with
respect to its net investment in the associate. When necessary, the entire
carrying amount of the investment is tested for impairment in accordance with
IAS 36 as a single asset, by comparing its recoverable amount (higher of
value-in-use and fair value less costs to sell) with its carrying amount. Any
impairment loss is recognised in profit or loss. Reversal of an impairment
loss is recognised to the extent that the recoverable amount of the investment
subsequently increases.
Financial assets
Trade and other receivables are recognised initially at fair value and
subsequently measured at amortised cost when the contractual right to receive
cash or other financial assets from another entity is established.
A provision for doubtful debts is made when there is objective evidence that
the Group will not be able to collect all amounts due according to the
original terms of the receivables. Significant financial difficulties of the
debtor, probability that the debtor will enter bankruptcy or financial
reorganisation and default or delinquency in payments are considered
indicators that a trade and other receivables are impaired.
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less which have an insignificant risk of changes in value and bank overdrafts. For the purpose of the Statement of Financial Position, bank overdrafts are presented in borrowings.
Bank deposits with maturities over 3 months are separately recognised as other
financial assets.
Financial liabilities
Trade and other payables and loans and borrowings are subsequently measured
using amortised cost accounting using the effective interest rate method.
Equity instruments
Instruments that evidence a residual interest in the assets of the Group after
deducting all of its liabilities are classified as equity instruments.
Issued equity instruments are recorded at proceeds received net of direct
issue costs.
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares or options are shown in equity as a
deduction, net of value added tax, from the proceeds.
Financial instruments
Financial instruments carried on the Statement of Financial Position include
cash and bank balances, deposits, investments, receivables, payables and
borrowings. Financial instruments are recognised in the Statement of Financial
Position when the Group has become a party to the contractual provisions of
the instrument.
Financial instruments are classified as liabilities or equity in accordance
with the substance of the contractual arrangement. Interest, dividends and
gains and losses relating to a financial instrument classified as a liability,
are reported as an expense or income. Distributions to holders of financial
instruments classified as equity are charged directly to equity. Financial
instruments are offset when the Group has a legally enforceable right to
offset and intends to settle either on a net basis or to realise the asset and
settle the liability simultaneously.
The particular recognition method adopted for financial instruments recognised
on the Statement of Financial Position is disclosed in the individual
accounting policy statements associated with each item.
Segment reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision makers are responsible for allocating resources and assessing
performance of the operating segments and make overall strategic decisions.
The Group's operating segments are organised and managed separately according
to the nature of the products and services provided, with each segment
representing a strategic business unit that offers different products and
serves different markets.
Investment property
Investment property is held at cost over the expected useful life of the
property. As required by IAS 40, fair value of the property is disclosed and
where the fair value exercise determines that the fair value is lower than the
carrying amount, an impairment is recorded. Rental income is recognised in
'Other operating income'. The investment property is depreciated on a straight
line basis over 50 years, which represents the Directors' assessment of the
expected useful life of the property. Where there is a change in use of the
property, an assessment is made if the asset should be transferred into a
different asset category according to it intended use.
3. FINANCIAL INSTRUMENTS
(a) Financial risk management objectives and policies
The Group and the Company's financial risk management policy is to ensure that
adequate financial resources are available for the development of the Group
and of the Company's operations whilst managing its financial risks, including
interest rate risk, credit risk, foreign currency exchange risk, liquidity and
cash flow risk and capital risk. The Group and the Company operates within
clearly defined guidelines that are approved by the Board and the Group's
policy is not to engage in speculative transactions.
(b) Interest rate risk
Cash flow interest rate risk is the risk that the future cash flows of a
financial instrument will fluctuate because of changes in market interest
rates. Fair value interest rate risk is the risk that the value of a
financial instrument will fluctuate due to changes in market interest rates.
As the Group has no significant interest-bearing financial assets, the Group's
income and operating cash flows are substantially independent of changes in
market interest rates.
The Group's interest rate risk arises primarily from interest-bearing
borrowings. Borrowings at floating rates expose the Group to cash flow
interest rate risk. Borrowings obtained at fixed rates expose the Group to
fair value interest rate risk.
The following tables set out the carrying amounts, the effective interest
rates as at the Statement of Financial Position date and the remaining
maturities of the Group's financial instruments that are exposed to interest
rate risk:
Effective
Interest Within More than
At 31 December 2023 Note Rate 1 year 1-2 years 2-5 years 5 years Total
% £ £ £ £ £
Fixed rate:
Fixed deposits 18 2.50-3.00 1,636,242 - - - 1,636,242
Floating rate:
Bankers' acceptance 25 4.80-5.08 (4,028,799) - - - (4,028,799)
Term loan 25 4.34 (17,645) (17,645) (35,290) (208,796) (279,376)
At 31 December 2022
Fixed rate:
Fixed deposits 18 1.40-2.60 1,768,584 - - - 1,768,584
Floating rate:
Bankers' acceptance 25 3.80-5.13 (3,638,665) - - - (3,638,665)
Term loan 25 4.15 (8,817) (9,433) (20,713) (191,551) (230,514)
Sensitivity analysis for interest rate risk
The interest rate profile of the Group's significant interest-bearing
financial instruments, based on carrying amounts as at the end of the
reporting period was:
Group
2023 2022
£ £
Floating rate instruments
Financial liabilities (Note 25) 4,225,824 3,869,179
Interest rate risk sensitivity analysis
(i) Fair value sensitivity analysis for fixed rate
instruments
The Group does not account for any fixed rate financial assets and liabilities
at fair value through profit or loss. Therefore, a change in interest rates at
the end of the reporting period would not affect profit or loss.
(ii) Cash flow sensitivity analysis for variable rate
instruments
A change of 100 basis points (bp) in interest rates at the end of the
reporting period would have increased/(decreased) post-tax profit by the
amounts shown below. This analysis assumes that all other variables, in
particular foreign currency rates, remained constant.
Group
Profit or loss
100 bp 100 bp
Increase Decrease
£ £
2023
Floating rate instruments (42,258) 42,258
2022
Floating rate instruments (38,692) 38,692
(c) Credit risk
The Group's and the Company's exposure to credit risk arises mainly from
receivables. Receivables are monitored on an ongoing basis via management
reporting procedure and action is taken to recover debts when due. At each
Statement of Financial Position date, there was no significant concentration
of credit risk. The maximum exposure to credit risk for the Group and the
Company is the carrying amount of the financial assets shown in the Statement
of Financial Position.
(d) Foreign currency exchange risk
The Group is exposed to foreign currency risk on transaction that are
denominated in foreign currency of Ringgit Malaysia (RM).
The Group has not entered into any derivative instruments for hedging or
trading purposes as the net exposure to foreign currency risk is not
significant. Where possible, the Group will apply natural hedging by selling
and purchasing in the same currency. However, the exposure to foreign currency
risk is monitored from time to time by management.
The carrying amounts of the Group's foreign currency denominated financial
assets and financial liabilities at the end of the reporting period are as
follows:
Denominated in
RM
2023 £
Group
Deposits, cash and bank balances 4,126,899
Trade and other receivables 2,688,902
Trade and other payables (7,955,005)
Lease liabilities (166,837)
Loans and borrowings (4,225,824)
Net currency exposure (5,531,865)
2022
Group
Deposits, cash and bank balances 5,015,172
Trade and other receivables 2,367,645
Trade and other payables (2,916,524)
Lease liabilities (203,766)
Loans and borrowings (3,869,179)
Net currency exposure 393,348
Sensitivity analysis for foreign currency exchange risk
The following table demonstrates the sensitivity of the Group's profit before
tax to a reasonably possible change in RM exchange rates against £, with
other variables held constant.
Effect on profit before tax
2023 2022
£ £
Group
Change in currency rate
RM Strengthen 10% 553,187 (39,335)
Weakened 10% (553,187) 39,335
(e) Liquidity and cash flow risks
The Group and the Company seeks to achieve a flexible and cost effective
borrowing structure to ensure that the projected net borrowing needs are
covered by available committed facilities. Debt maturities are structured in
such a way to ensure that the amount of debt maturing in any one year is
within the Group's and the Company's ability to repay and/or refinance.
The Board notes that current liabilities exceed current assets at year end.
However, as explained in the going concern disclosure, deferred consideration
in respect of Sincere Acres is expected to be paid after the completion of the
TETE Merger. In the event that the Group does not have sufficient funds to
settle the deferred consideration, for example in a scenario where the TETE
Merger is delayed or unsuccessful, the Board intends to surrender the interest
in Sincere Acres back to the vendor. Therefore the liquidity risk associated
with the deferred consideration is limited. When excluding the deferred
consideration, current assets exceed current liabilities and therefore the
Board considers that liquidity risk is appropriately managed.
The Group and the Company also maintains a certain level of cash and cash
convertible investments to meet its working capital requirements.
The table below summarises the maturity profile of the Group's liabilities at
the reporting date based on contractual undiscounted repayment obligations:
On demand or
within one year one to five year over five year Total
2023 £ £ £ £
Group
Financial liabilities
Trade and other
payables 3,169,711 - - 3,169,711
Deferred
consideration
due 4,788,453 - - 4,788,453
Amount due to
Directors 35,300 - - 35,300
Lease liabilities 70,728 53,470 53,960 178,158
Loans and
borrowings 4,036,396 26,711 162,717 4,225,824
Total undiscounted
financial liabilities 12,100,588 80,181 216,677 12,397,446
On demand or
within one year one to five year over five year Total
2022 £ £ £ £
Group
Financial liabilities
Trade and other 2,947,056 - - 2,947,056
payables
Amount due to Directors 66,855 - - 66,855
Lease liabilities 113,860 89,906 - 203,766
Loans and
borrowings 3,647,482 30,146 191,551 3,869,179
Total undiscounted
financial liabilities 6,775,253 120,052 191,551 7,086,856
The table below summarises the maturity profile of the Company's liabilities
at the reporting date based on contractual undiscounted repayment obligations:
On demand or
within one year one to five year over five year Total
2023 £ £ £ £
Company
Financial liabilities
Trade and other 995 - - 995
payables
Amount due to
subsidiary
company 870,686 - - 870,686
Amount due to
directors 35,300 - - 35,300
Total undiscounted
financial liabilities 906,981 - - 906,981
2022
Company
Financial liabilities
Trade and other 10,658 - - 10,658
payables
Amount due to
subsidiary
company 612,703 - - 612,703
Amount due to
directors 64,183 - - 64,183
Total undiscounted - -
financial liabilities 687,544 - - 687,544
(f) Fair Values
The carrying amounts of financial assets and financial liabilities are
reasonable approximation of fair value due to their short term nature.
The carrying amounts of the current portion of borrowing is reasonable
approximation of fair value due to the insignificant impact of discounting.
(g) Capital risk
The Group's and the Company's objectives when managing capital are to
safeguard the Group's and the Company's ability to continue as a going concern
in order to provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce the cost
of capital. In order to maintain or adjust the capital structure, the Group
and the Company may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce
debt.
4. EMPLOYEES AND DIRECTORS
Group
2023 2022
£ £
EMPLOYEES
Wages, salaries and bonuses 1,671,192 1,788,138
Social security contribution 18,434 15,910
Contribution to defined contribution plan 172,232 165,287
Other staff related expenses 21,429 17,119
1,883,287 1,986,454
DIRECTORS
Fees 70,990 128,230
Wages, salaries and bonuses 170,347 150,207
Social security contribution 335 524
Contribution to defined contribution plan 19,722 17,837
261,394 296,798
The number of employees (excluding Directors) of the Group and of the Company
at the end of the financial year were 127 (2022: 110) and Nil (2022: Nil)
respectively.
The details of remuneration received and receivables by the Directors of the
Group during the financial year are as follows:
Fees Salaries and allowances Bonuses Social security contribution Defined contribution plan Total
Group
2023 £ £ £ £ £ £
Company's Directors:
Abu Bakar bin Mohd 6,340 - - - - 6,340
Taib
Dato' Hussian @ Rizal
bin A. Rahman 36,000 78,188 - 131 9,383 123,702
Derrick Chia Kah Wai 2,000 86,159 - 204 10,339 98,702
Seah Boon Chin 14,650 - - - - 14,650
Azlinda Ezrina Binti Ariffin 12,000 6,000 - - - 18,000
70,990 170,347 - 335 19,722 261,394
2022
Company's Directors:
Abu Bakar bin Mohd 6,627 - - - - 6,627
Taib
Dato' Hussian @ Rizal
bin A. Rahman 36,000 81,730 - 340 9,619 127,689
Derrick Chia Kah Wai 24,803 68,477 - 184 8,218 101,682
Seah Boon Chin 43,800 - - - - 43,800
Azlinda Ezrina Binti Ariffin 17,000 - - - - 17,000
128,230 150,207 - 524 17,837 296,798
* Re-assignment of Derrick Chia Kah Wai's fees payable by the
Company to salaries payable by MobilityOne Sdn Bhd.
No employees of the Group were considered as key management personnel other
than the members of the Company Board.
5. OPERATING SEGMENTS
The information reported to the Group's chief operating decision maker to make
decisions about resources to be allocated and for assessing their performance
is based on the nature of the products and services, and has two reportable
operating segments as follows:
Telecommunication services and electronic commerce solution Technology managed services and solution provider and consultancy
Hardware and services Providing e-Channel products and services solutions including selling of
hardware, remittance services and money lending income.
Except as above, no other operating segment has been aggregated to form the
above reportable operating segments.
Measurement of Reportable Segments
Segment information is prepared in conformity with the accounting policies
adopted for preparing and presenting the consolidated financial statements.
No segment assets and capital expenditure are presented as they are mostly
unallocated items which comprise corporate assets and liabilities. The Board
considers that an apportionment of assets, liabilities or expenses to the
identified segments would not be meaningful or material information as
segmental information is only prepared and reviewed at revenue level
No geographical segment information is presented as more than 95% of the
Group's revenue for the financial ended 31 December 2023 was generated in
Malaysia.
Major Customer
During the year, Customer A contributed 58% to Group revenue and Customer B
contributed 13%
(2022: Customer A contributed 64%). All revenues from these two customers
(2022: one customer) are attributable to the "Telecommunication services and
electronic commerce solution" operating segment.
Telecommunication
services and
electronic Hardware Inter-segment
Group commerce solutions and services trading Total
2023 £ £ £ £
Segment revenue:
External customers 239,532,015 2,141,937 - 241,673,952
Inter-segment - 167,282 (167,282) -
239,532,015 2,309,219 (167.282) 241,673,952
Loss before tax 1,369,614
Tax (38,518)
Loss for the year (1,408,132)
Telecommunication
services and electronic Hardware Inter-segment
Group commerce solutions and services trading Total
2022 £ £ £ £
Segment revenue:
External customers 230,754,843 3,006,828 - 233,761,671
Inter-segment - 289,703 (289,703) -
230,754,843 3,296,531 (289,703) 233,761,671
Profit before tax 278,978
Tax (262,350)
Profit for the year 16,628
6. FINANCE COSTS
Group
2023 2022
£ £
Bankers' acceptance interest 199,798 106,465
Bank guarantee interest 10,898 6,631
Bank overdraft 11,218 4,692
Lease liabilities 8,163 10,286
Term loan 5,981 9,069
236,058 137,143
7. (LOSS)/PROFIT BEFORE TAX
(Loss)/Profit before tax is stated after charging/(crediting):
Group
Restated
2023 2022
Note £ £
Auditors' remuneration
- Statutory audit
- Current year 33,000 37,148
- Under provided in prior year - (2,761)
Amortisation of intangible assets 11 - 68,051
Amortisation of right-of-use assets 14 96,320 132,580
Bad debt written off 12,131 5,622
Depreciation of property, plant and equipment 12 248,032 275,916
Depreciation of investment property 13 6,344 6,631
Deposit written-off - 9,112
Directors' remuneration 4 261,394 296,798
(Gain)/Loss on foreign exchange
- realised - 7
- unrealised - (22,279)
Gain on disposal of property, plant and 12 (1,437) (8,464)
equipment
Gain on disposal of right-of-use assets (3,234) -
Impairment loss on goodwill 11 - 177,546
Impairment loss on other receivable - 3,403
Inventories written off 808 -
Interest income (39,435) (35,933)
Net impairment loss on trade receivable 315,009 277,474
Operating lease payment of premises and
equipment 60,242 51,128
8. TAX
Group
2023 2022
£ £
Current tax expense:
Jersey corporation tax for the year - -
Foreign tax 5,570 299,354
(Over) provision in prior year (55) (7,966)
5,515 291,388
Deferred tax expense:
Relating to origination and reversal
of temporary difference 33,003 (29,038)
38,518 262,350
A reconciliation of income tax expense applicable to profit before tax at the
statutory income tax rate to income tax expense at the effective income tax
rate of the Group is as follows:
Group
2023 2022
£ £
(Loss)/Profit before taxation (1,369,614) 278,978
Taxation at Malaysian statutory tax rate of 24% (328,707) 66,955
(2022 24%)
Effect of different tax rates in other countries (7,347) 10,060
Effect of expenses not deductible for tax 231,721 178,737
Income not taxable for tax purpose (37,682) (20,583)
Deferred tax assets not recognised 180,588 215,735
Under/(over) provision of tax expense in prior year (55) (7,966)
Tax expense for the year 38,518 262,350
As at 31 December 2023, the unrecognised deferred tax assets of the Group are
as follows:
Group
2023 2022
£ £
Unabsorbed tax losses 1,593,792 1,267,534
Unabsorbed capital allowances 475,086 304,057
2,068,878 1,571,591
The potential deferred tax assets amounting to £2,068,878 (2022: £1,460,339)
have not been recognised in the financial statements because it is not
probable that future taxable profit will be available against which the
subsidiary company can utilise the benefits.
The availability of the unused tax losses and unabsorbed capital allowances
for offsetting against future taxable profits of the subsidiary company is
subject to no substantial changes in shareholdings of the subsidiary company
under Section 44(5A) and (5B) of Income Tax Act, 1967, in Malaysia.
Under the Malaysia Finance Act 2018 which was gazetted on 27 December 2018,
the unutilised tax losses of the Group and of the Company will be imposed with
a time limit of utilisation. Any accumulated unutilised tax losses brought
forward can be carried forward for a maximum period of 7 consecutive years of
assessment. With effect from year of assessment 2022, unutilised tax losses
that were allowed to be carried forward up to seven consecutive years was
extended to a maximum of ten consecutive years of assessment under the current
tax legislation. The unabsorbed capital allowances do not expire under current
tax legislation.
Pursuant to Section 44(5F) of the Income Tax Act 1967, the unutilised tax
losses can only be carried forward until the following years of assessment.
Group
2023 2022
£ £
Unitilised tax losses to be carried forward until:
-2028 1,045,088 1,154,640
-2029 18,151 20,054
-2030 1,733 1,914
-2031 748 826
-2032 81,550 90,100
-2033 446,522 -
1,593,792 1,267,534
9. LOSS OF COMPANY
The profit or loss of the Company is not presented as part of these financial
statements. The Company's loss for the financial year was £274,674 (2022:
£178,125).
10. (LOSS)/PROFIT PER SHARE
Group
2023 2022
£ £
(Loss)/Profit attributable to owners of the Parent for
the computation of basic earnings per share
(Loss)/Profit from continuing operations (1,408,482) 23,857
Weighted average number of shares at 31 December 106,298,780
106,298,780
Diluted weighted average number of shares 106,209,780 112,623,648
at 31 December
(Loss)/Profit Per Share
Basic earnings per share (pence) (1,325) 0.022
Diluted earnings per share (pence) (1,325) * 0.021
(Loss)/Profit Per Share from continuing operations
Basic earnings per share (pence) (1,325) 0.022
Diluted earnings per share (pence) (1,325) * 0.021
* As the Group reported a loss for the year, there is
no dilutive effect of share options.
The basic earnings per share is calculated by dividing the loss of £1,408,482
(2022: profit of £23,857) attributable to ordinary shareholders by the
weighted average number of ordinary shares outstanding during the year, which
is 106,298,780 (2022: 106,298,780).
The diluted earnings per share is calculated using the weighted average number
of shares adjusted to assume the exercise of outstanding dilutive share
options.
11. INTANGIBLE ASSETS
Group Goodwill on Development
31 December 2023 Software consolidation costs Total
£ £ £ £
At cost
At 1 January 2023 1,071,081 1,797,697 990,082 3,858,860
Addition - - 373,965 373,965
Foreign exchange differences (101,624) (179,565) (93,939) (366,128)
At 31 December 2023 969,457 1,627,132 1,270,108 3,866,697
Accumulated amortisation and impairment loss
At 1 January 2023 1,071,067 1,583,531 990,082 3,644,680
Foreign exchange differences (101,623) (150,245) (93,938) (345,806)
At 31 December 2023 969,444 1,433,286 896,144 3,298,874
Net Carrying Amount
At 31 December 2023 13 193,846 373,964 567,823
Group Goodwill on Development
31 December 2022 Software consolidation costs Total
£ £ £ £
At cost
At 1 January 2022 1,006,732 1,689,693 930,598 3,627,023
Foreign exchange differences 64,349 108,004 59,484 231,873
At 31 December 2022 1,071,081 1,797,697 990,082 3,858,860
Accumulated amortisation and impairment loss
At 1 January 2022 941,066 1,321,515 930,598 3,193,179
Amortisation charge for the year 68,051 - - 68,051
Impairment loss recognise - 177,546 - 177,546
Foreign exchange differences 61,950 84,470 59,484 205,904
At 31 December 2022 1,071,067 1,583,531 990,082 3,644,680
Net Carrying Amount
At 31 December 2022 14 214,166 - 214,180
The Group assesses at each reporting date whether there is an indication that
an asset may be impaired, by considering the net present value of discounted
cash flows forecasts. If an indication exists an impairment review is carried
out. In the case of goodwill, an automatic annual impairment test is
performed.
Goodwill on consolidation
(a) Impairment testing for goodwill on consolidation
Goodwill on consolidation has been allocated for impairment testing purposes
to the individual entity which is also the cash-generating units ("CGU")
identified. The Group's goodwill arose in relation to the acquisition
OneTransfer Remittance which operates the Group's remittance business.
Management considers that the goodwill represents the growth opportunity in
the sector and potential synergistic benefits with the wider business.
(b) Key assumptions used to
determine recoverable amount
The recoverable amount of a CGU is determined based on value in use
calculations using cash flow projections based on financial budgets approved
by the Directors covering a 5 years period. The projections are based on the
assumption that the Group can recognise projected sales which grow at 20% to
30% per annum which is based on expected clientele growth over time. A prudent
approach has been applied with no residual value being factored into these
calculations. If the projected sales do not materialise there is a risk that
the total value of the intangible assets shown above would be impaired. A
pre-tax discount rate of 7.2% (2022: 8.0%) per annum was applied to the cash
flow projections, after taking into consideration the Group's cost of
borrowings, the expected rate of return and various risks relating to the CGU.
The directors have relied on past experience and all external evidence
available in determining the assumptions.
During the financial year, the Group recognized an impairment loss amounting
to £Nil (2022: £177,546) in respect of the goodwill on consolidation. The
entirety of goodwill on consolidation relates to the acquisition of
OneTransfer Remittance Sdn Bhd which is a CGU and has a carrying amount of
£193,846 (2022: £214,166). Its recoverable amount has been determined based
on value-in-use by using discounting future cash flow to be generated by the
CGU and key assumptions as described in (b) above. The impairment test showed
that goodwill would not be impaired if the discount rate were 5% higher or if
sales grew at a rate 10% less than projected.
Development costs
Development costs represent two distinct internally generated assets, both of
which are expected to create benefits to the Group for a period of five
years. Amortisation will commence when the asset is ready for use, which in
the case of the internal generation of technological capabilities is when the
build phase is completed and testing has demonstrated that the product can be
commercially deployed. Amortisation of development assets is included within
Administrative expenses in profit of loss. The development assets relate to
new payment technology capabilities which are expected to enhance the earnings
capability within the Group's existing principal activities.
The Company held no intangible assets or goodwill.
12. PROPERTY, PLANT AND EQUIPMENT (As Restated)
Electronic
Group Motor Data Capture Computer Computer Furniture Office
vehicles equipment equipment software and fittings equipment Renovation Total
31 December 2023 £ £ £ £ £ £ £ £
At Cost
At 1 January 2023 289,490 1,052,756 1,177,813 161,418 134,968 140,357 200,622 3,157,424
Additions - 24,654 10,423 11,583 99 333 - 47,092
Disposals - (1,982) - - - - - (1,982)
Written off - - (19,772) - (581) - - (20,353)
Foreign exchange differences (27,466) (100,540) (111,481) (15,649) (12,792) (13,143) (19,035) (300,106)
At 31 December 2023 262,024 974,888 1,056,983 157,352 121,694 127,547 181,587 2,882,075
Accumulated Depreciation
At 1 January 2023 289,489 892,373 726,941 73,802 106,700 78,492 150,558 2,318,355
Depreciation charge for the year - 96,028 100,835 12,955 5,820 14,531 18,151 248,320
Disposals - (1,302) - - - - - (1,302)
Foreign exchange differences (27,466) (87,440) (71,883) (7,375) (10,292) (8,066) (14,809) (227,331)
At 31 December 2023 262,023 899,659 755,893 79,382 102,228 84,957 153,900 2,338,042
Net Carrying Amount
At 31 December 2023 1 75,229 301,090 77,970 19,466 42,590 27,687 544,033
Electronic
Group Motor Data Capture Computer Computer Furniture Office
vehicles equipment equipment software and fittings equipment Renovation Total
£ £ £ £ £ £ £ £
Restated
31 December 2022
At Cost
At 1 January 2022 289,003 982,244 806,822 134,244 123,627 83,638 188,569 2,608,147
Additions - 7,529 311,194 18,115 3,351 49,867 - 390,056
Disposals (17,986) - - - - - - (17,986)
Foreign exchange differences 18,473 62,983 59,797 9,059 7,990 6,852 12,053 177,207
At 31 December 2022 289,490 1,052,756 1,177,813 161,418 134,968 140,357 200,622 3,157,424
Accumulated Depreciation
At 1 January 2022 289,002 714,633 592,556 57,112 94,399 59,207 123,086 1,929,995
Depreciation charge for the year - 128,660 94,025 12,704 6,105 15,036 19,099 275,629
Disposals (17,986) - - - - - - (17,986)
Foreign exchange differences 18,473 49,080 40,360 3,986 6,196 4,249 8,373 130,717
At 31 December 2022 289,489 892,373 726,941 73,802 106,700 78,492 150,558 2,318,355
Net Carrying Amount
At 31 December 2022 1 160,383 450,872 87,616 28,268 61,865 50,064 839,069
(a) Cash payments of £47,092 (2022: £390,056) were made
by the Group to purchase property, plant and equipment.
(b) The Company held no property, plant and equipment.
13. INVESTMENT PROPERTY
Group
Restated
2023 2022
£ £
At Cost
At 1 January 340,315 319,869
Foreign exchange differences (32,289) 20,446
At 31 December 308,026 340,315
Accumulated Depreciation
At 1 January 57,190 47,357
Depreciation charge for the year 6,344 6,631
Foreign exchange differences (5,610) 3,202
At 31 December 57,924 57,190
Net Carrying Amount
At 31 December 250,102 283,125
At Cost
Included in the above are:
Freehold building 250,102 283,125
Fair value of investment property 331,254 365,978
(a) Asset pledged as securities to licensed bank
The carrying amount of investment property of the Group pledged as securities
for bank borrowings as disclosed in Note 25.
The Group owns a freehold property in Kuala Lumpur which is let to an external
party. The Group therefore accounts for the property as an investment
property. The Directors have elected to hold the investment property under
the cost model. The fair value of the property disclosed above was
determined by the Directors, using a desktop review of achievable price per
square foot of similar properties in a similar location. No independent valuer
was appointed for this purpose. Rental income of £14,792 (2022: £15,462) was
recognised in other income in respect of the property. The property is
depreciated straight line over a period of 50 years which is the assessed
useful life of the asset.
14. RIGHT-OF-USE ASSETS
Leasehold Office
Machine Motor Vehicles Building improvement Equipment Total
£ £ £ £ £ £
Group
2023
At Cost
At 1 January 2023 - 324,687 254,658 9,879 13,117 602,341
Additions 78,125 - 24,500 - - 102,625
Written off - - (49,257) - - (49,257)
Expiration of lease contract - - (33,825) - - (33,825)
Foreign exchange differences (2,255) (30,805) (23,448) (484) (1,245) (58,237)
At 31 December 2023 75,870 293,882 172,628 9,395 11,872 563,647
Accumulated Amortisation
At 1 January 2023 - 270,006 133,580 9,590 6,230 419,406
Charge for the financial year 7,812 19,722 65,689 957 2,139 96,319
Written off - - (31,119) - - (31,119)
Expiration of lease contract - - (33,825) - - (33,825)
Foreign exchange differences (225) (26,188) (13,673) (1,152) (651) (41,889)
At 31 December 2023 7,587 263,540 120,652 9,395 7,718 408,892
Net Carrying Amount
At 31 December 2023 68,283 30,342 51,976 - 4,154 154,755
Leasehold Office
Motor Vehicles Building improvement Equipment Total
£ £ £ £ £
Group
2022
At Cost
At 1 January 2022 305,180 161,351 9,627 12,329 488,487
Additions - 152,494 - - 152,494
Written off - (5,019) - - (5,019)
Expiration of lease contract - (68,380) - - (68,380)
Foreign exchange differences 19,507 14,212 252 788 34,759
At 31 December 2022 324,687 254,658 9,879 13,117 602,341
Accumulated Amortisation
At 1 January 2022 223,737 97,009 8,382 3,699 332,827
Charge for the financial year 31,144 98,214 986 2,236 132,580
Written off - (2,008) - - (2,008)
Expiration of lease contract - (68,380) - - (68,380)
Foreign exchange differences 15,125 8,745 222 295 24,387
At 31 December 2022 270,006 133,580 9,590 6,230 419,406
Net Carrying Amount
At 31 December 2022 54,681 121,078 289 6,887 182,935
Lease Liabilities
Group
2023 2022
Total Total
£ £
At 1 January 203,766 155,489
Addition 99,663 156,525
Payments (96,503) (116,670)
Written off (21,372) (1,477)
Foreign currency translation differences (18,717) 9,899
At 31 December 166,837 203,766
Presented as:
Non-current 101,465 98,450
Current 65,372 105,316
166,837 203,766
Minimum lease payments:
Not later than 1 year 70,728 113,860
Later than 1 year but not later than 2 years 53,470 51,693
Later than 2 years but not later than 5 years 53,960 50,102
178,158 215,655
(11,321)
Less: Future finance charges (11,889)
Present value of lease liabilities 166,837 203,766
The Company held no leases or right of use assets.
15. TRADE AND OTHER RECEIVABLES
Group Company
2023 2022 2023 2022
£ £ £ £
Trade receivables
Non-current
Trade receivables
- Third parties 17,105 234,566 - -
- An associate 262,614 - - -
Less: Accumulated
impairment loss (21,291) (6,516) - -
258,428 228,050 - -
Current
Trade receivables
- Third parties 1,940,845 1,813,129 - -
- A related party 18,049 1,021
- An associate 598,965 - - -
Less: Accumulated
impairment loss (548,216) (284,706) - -
2,009,643 1,529,444 - -
2,268,071 1,757,494 - -
Other receivables - -
- Third parties 378,436 368,653
- An associate 51,971 -
Less: Accumulated
impairment loss - (3,403) - -
430,407 365,250 - -
- Deposits 237,377 258,827 - -
- Prepayments 9,816 23,856 - -
- Staff advances 1,659 2,408 - -
679,259 650,341 - -
Total trade and
other receivables 2,947,330 2,407,835 - -
The Group's and the Company's normal trade credit terms range from 30 to 60
days (2022: 30 to 60 days). Other credit terms are assessed and approved on a
case to case basis.
Movements in the allowance for impairment losses on trade receivables are as
follows:
Group
2023 2022
£ £
Lifetime allowance
At 1 January 10,864 13,750
Impairment losses recognised 128,842 2,175
Reversal - (5,061)
Foreign exchange differences (4,750) -
At 31 December 134,956 10,864
Credit impairment
At 1 January 280,358 -
Impairment losses recognised 248,569 280,358
Reversal (62,402) -
Foreign exchange differences (31,974) -
At 31 December 434,551 280,358
Loss allowance
At 1 January 291,222 13,750
Impairment losses recognised 377,411 282,533
Reversal (62,402) (5,061)
Foreign exchange differences (36,724) -
At 31 December 569,507 291,222
Lifetime allowances reflects the expected credit loss provision on trade and
other receivables which are not considered to be subject to a significant
increase in credit risk and therefore are subject to credit loss provisions by
reference to the class of borrower and ageing of the receivable.
Credit impairment represents receivables which exhibit a significant increase
in credit risk and under the Group's provisioning policy are provided at
100%. Interest income is no longer recognised on these balances. The Group
determines that a significant increase in credit risk arises when specific
information is determine to indicate such a change in credit exposure or
because more than 90 days have passed without payment or indication that
payments will resume in the foreseeable future.
(a) Ageing analysis
An ageing analysis of trade receivables that are neither individually nor
collectively considered to be impaired is as follows:
Group
2023 2022
£ £
Neither past due nor
impaired 784,788 583,537
1 to 2 months past due 734,090 408,392
3 to 12 months past due 1,318,700 1,056,787
2,852,790 1,465,179
2,837,578 2,048,716
(a) The Group's and the Company's normal trade credit terms range
from 30 to 60 days
(2022: 30 to 60 days). Other credit terms are assessed and approved on a case
to case basis.
Receivables that were neither past due nor impaired relate to a wide range of
customers for whom there was no recent history of default.
Receivables that were past due but not impaired relate to a number of
independent customers that have a good track record with the Group. Based on
past experience, management believes that no impairment allowance is necessary
in respect of these balances as there has not been a significant change in
credit quality and the balances are still considered fully recoverable.
(b) The Group recognise an allowance for expected credit losses
("ECLs") for all debt instruments not held at FVTPL, ECLs are based on the
difference between the contractual cash flows due in accordance with the
contract and all the cash flows that the Group expect to receive, discounted
at an approximation of the original effective interest rate. The expected cash
flows will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contract terms.
ECLs are recognised in two stages. For credit exposures for which there has
not been a significant increase in credit risk since initial recognition, ECLs
are provided for credit losses that result from default events that are
possible within the next 12-months ("a 12-month ECL"). For those credit
exposures for which there has been a significant increase in credit risk since
initial recognition, a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of the timing of the
default ("a lifetime ECL").
For trade receivables, the Group apply a simplified approach in calculating
ECLs. Therefore, the Group do not track changes in credit risk, but instead
recognises a loss allowance based on lifetime ECLs at each reporting date. The
Group have established a provision matrix that is based on its historical
credit loss experience, adjusted for forward-looking factors specific to the
debtors and the economic environment.
Credit loss provisions are assessed by reference to historic cash collection
rates and macroeconomic factors. Within the Group's telecomms operating
segment, ECL rates range between 0.2% and 2.7% given the long term
relationships the Group has with its core customer base. Within the hardware
and services operating segment, ECL rates range from 1.1% to 66%, with an
average rate of 13%, given the varied risk characteristics of debtors in the
Group's lending business.
16. INVESTMENT IN ASSOCIATE
Group
2023 2022
£ £
At cost:
At acquisition 5,130,485 -
Share of post-acquisition result (120,201) -
Balance at end of the financial year 5,010,284 -
Details of the associate are as follows:
Effective Ownership of Ordinary Shares
Name of associated Country of Interest Principal Activities
Companies Incorporation 2023 2022
% %
Sincere Acres Sdn. Bhd.* Malaysia 49 - Holding company
Held through
Sincere Acres Sdn. Bhd.
Hati International Sdn. Bhd.* Malaysia 100 100 Information technology related services, investment holding and general
trading
Hati Malaysia Solutions Sdn. Bhd.* Malaysia 100 100 Information technology related services
Held through
Hati International Sdn. Bhd.
SD Global IT Solutions Sdn. Bhd.* Malaysia 100 100 Technology solution and business development
* Audited by firm of auditors other than Gravita Audit Limited.
On 29 September 2023, MobilityOne Sdn Bhd ("M1 Malaysia") entered into a Share
Sale Agreement with United Flagship Development Sdn. Bhd. (the "Vendor") to
acquire a 49% equity interest in Sincere Acres Sdn. Bhd. for a total cash
consideration of RM 30,000,000.
The principal place of business of Sincere Acres Sdn. Bhd. and Hati
International Sdn Bhd is located at Unit-03A, Level 11, Tower B, The Vertical
Business Suite, 8, Jalan Kerinchi, Bangsar South, 59200 Kuala Lumpur,
Malaysia.
Completion of the acquisition of 49% equity interest in Sincere
Pursuant to the terms of the Acquisition, the RM30,000,000 cash consideration
is required to be paid to the Vendor in two tranches. While the first tranche,
representing RM2.0 million, has been paid by M1 Malaysia to the Vendor, the
second tranche, representing the balance of RM28 million (£4.8 million) (the
"Second Tranche"), was required be paid by M1 Malaysia by 8 March 2024 (the
"Second Tranche Payment Date").
While the Second Tranche Payment Date has been extended to 8 September 2024
(the "Extended Second Tranche Payment Date"), any payment in relation to the
Second Tranche made after the Second Tranche Payment Date will be subject to
an interest charge of 10% per annum. The balance amount payable for the Second
Tranche (including any interest charge if the payment is made after the Second
Tranche Payment Date) shall be reduced by RM1 million when the payment is made
by the Extended Second Tranche Payment Date.
Summarised financial information of the Group's material associated company,
Sincere is set out below:
(a) Summarised consolidated statement of financial position of
Sincere
2023
£
Cash and cash equivalent 3,016
Other current asset 87,875
Non-current assets 3,839,622
Current financial liabilities (excluding trade and other payables and (3,442,839)
provisions)
Other current liabilities (441,861)
Net assets 45,813
Interest in associate 49%
Group's share of net assets 22,448
Goodwill 4,987,836
Carrying value of Group's interest in associate 5,010,284
(b) Summarised consolidated statement of profit or loss and
other comprehensive income of Sincere
2023
£
Total comprehensive loss for the period 4 October 2023 to
31 December 2023 (252,600)
Group's share of loss (120,201)
Included in total comprehensive loss are:
Revenue 9,839
Amortisation of intangible assets (47,347)
Depreciation of property, plant and equipment (9,772)
Interest expense (34,694)
17. INVENTORIES
Group
2023 2022
£ £
At lower of cost and net realisable value:
Airtime 1,834,804 3,101,871
Electronic date capture equipment 71,587 79,356
Card 6,170 8,548
Trading goods 114 126
1,912,675 3,189,901
Recognised in profit or loss:
Cost of sales 229,742,340 224,905,178
Written off 784 -
18. OTHER FINANCIAL ASSETS (As Restated)
Group
2023 2022
£ £
Fixed deposits with licensed bank 600,694 652,206
Other financial assets represents cash deposited at banks with maturities of
over 3 months at the time of the deposit.
(a) The above fixed deposits have been pledged to licensed
banks as securities for credit facilities granted to the Group as disclosed in
Note 25 to the financial statements.
(b) The Group's effective interest rates and maturities of
deposits are range from 2.5% - 3.0%
(2022: 1.4% - 2.6%) and from 12 months (2022: 12 months) respectively.
19. CASH AND CASH EQUIVALENTS (As Restated)
Group Company
2023 2022 2023 2022
£ £ £ £
Cash in hand 273,631 107,476 - -
Bank balances 2,226,956 3,139,112 9,930 11,264
Fixed deposits with
licensed bank 1,035,548 1,116,378 - -
Cash and cash
equivalents 3,536,135 4,362,966 9,930 11,264
(a) The above fixed deposits have been pledged to licensed
banks as securities for credit facilities granted to the Group as disclosed in
Note 25 to the financial statements.
(b) The Group's effective interest rates and maturities of
deposits are range from 2.5% - 3.0%
(2022: 1.4% - 2.6%) and from 1 month to 3 months (2022: 1 month to 3 months)
respectively.
20. CALLED UP SHARE CAPITAL
Number of ordinary shares of £0.025 each
Amount
2023 2022 2023 2022
£ £
Authorised in MobilityOne
Limited
At 1 January/31 December 400,000,000 400,000,000 10,000,000 10,000,000
Issued and fully paid in
MobilityOne Limited
At 1 January/31 December 106,298,780 106,298,780 2,657,470 2,657,470
21. COMPANY RESERVES
Share Share Retained
capital premium earnings Total
£ £ £ £
2023
At 1 January 2023 2,657,470 909,472 (2,211,245) 1,355,697
Loss for the year - - (274,674) (274,674)
At 31 December 2023 2,657,470 909,472 (2,485,919) 1,081,023
2022
At 1 January 2022 2,657,470 909,472 (2,033,120) 1,533,822
Loss for the year - - (178,125) (178,125)
At 31 December 2022 2,657,470 909,472 (2,211,245) 1,355,697
22. REVERSE ACQUISITION RESERVE
The acquisition of MobilityOne Sdn. Bhd. by MobilityOne Limited, which was
affected through a share exchange, was completed on 5 July 2007 and resulted
in MobilityOne Sdn. Bhd. becoming a wholly owned subsidiary of MobilityOne
Limited. Pursuant to a share swap agreement dated 22 June 2007 the entire
issued and paid-up share capital of MobilityOne Sdn. Bhd. was transferred to
MobilityOne Limited by its owners. The consideration to the owners was the
transfer of 178,800,024 existing ordinary shares and the allotment and
issuance by MobilityOne Limited to the owners of 81,637,200 ordinary shares of
2.5p each. The acquisition was completed on 5 July 2007. Total cost of
investment by MobilityOne Limited is £2,040,930, the difference between cost
of investment and MobilityOne Sdn. Bhd. share capital of £708,951 has been
treated as a reverse acquisition reserve.
23. FOREIGN CURRENCY TRANSLATION RESERVE
The subsidiary companies' assets and liabilities stated in the Statement of
Financial Position were translated into Sterling Pound (£) using the closing
rate as at the Statement of Financial Position date and the Income Statements
were translated into £ using the average rate for that period. All resulting
exchange differences are taken to the foreign currency translation reserve
within equity.
2023 2022
£ £
At 1 January 1,047,682 692,707
Currency translation differences during the year (543,531) 354,975
At 31 December 504,151 1,047,682
The foreign currency translation reserve is used to record exchange
differences arising from the translation of the financial statements of
foreign operations whose functional currencies are different from that of the
Group's presentation currency. It is also used to record the exchange
differences arising from monetary items which form part of the Group's net
investment in foreign operations, where the monetary item is denominated in
either the functional currency of the reporting entity or the foreign
operation.
24. RETAINED EARNINGS
Retained earnings represents the cumulative earnings of the Group attributable
to equity shareholders.
Group Company
2023 2022 2023 2022
£ £ £ £
At 1 January (93,766) (117,623) (2,211,245) (2,033,120)
(Loss)/Profit for the
year (1,408,482) 23,857 (274,674) (178,125)
At 31 December (1,502,248) (93,766) (2,485,919) (2,211,245)
25. FINANCIAL LIABILITIES - LOANS AND BORROWINGS
Group
2023 2022
Non-current £ £
Secured:
Term loan 189,428 221,697
189,428 221,697
Current
Secured:
Bankers' acceptance 4,028,799 3,638,665
Term loan 7,597 8,817
4,036,396 3,647,482
Total Borrowings
Secured:
Bankers' acceptance 4,028,799 3,638,665
Term loan 197,025 230,514
4,225,824 3,869,179
The bankers' acceptance and bank overdraft secured by the following:
(a) pledged of fixed
deposits of M1 Malaysia (Notes 18);
(b) Corporate Guarantee
given by the Company; and
(c) Debenture over M1
Malaysia's fixed and floating assets, both present and future.
The Company held no external borrowings.
The term loan is secured by the following:
(a) Charge over the Company's building (Note 12); and
(b) joint and several guaranteed by Dato' Hussian @ Rizal
bin A. Rahman and Derrick Chia Kah Wai, the Directors of the Company.
The effective interest rates of the Group for the above facilities other than
finance leases are as follows:
Group
2023 2022
% %
Bankers' acceptance 4.8%-5.08% 3.8-5.13
Term loan 4.34% 4.15
The maturity of borrowings (excluding leases) is as follows:
Group
2023 2022
£ £
Within one year 4.036,396 3,647,482
Between one to two years 8,250 9,433
Between two to five years 18,461 20,713
More than five years 162,717 191,551
4,225,824 3,869,179
Other information on financial risks of borrowings are disclosed in Note 3.
26. TRADE AND OTHER PAYABLES
Group Company
2023 2022 2023 2022
£ £ £ £
Trade payables
- Third parties 1,896,183 1,165,572 - -
Other payables
- Deposits 109,378 197,638 - -
- Accruals 125,210 601,267 - 8,033
- Sundry payables 1,034,159 971,739 995 2,625
- Services tax output 4,781 10,840 - -
Amount due to
subsidiary
companies - - 870,686 612,703
1,273,528 1,781,484 871,681 623,361
Total trade and
other payables 3,169,711 2,947,056 871,681 623,361
(a) The Group's normal trade credit terms range from 30 to
90 days (2022: 30 to 90 days).
(b) Other payables are non-interest bearing. Other
payables are normally settled on an average terms of 60 days (2022: 60 days).
(c) The carrying values of trade and other payables
approximates to their fair value.
27. AMOUNT DUE TO DIRECTORS
Group Company
2023 2022 2023 2022
£ £ £ £
Current
Dato' Hussian @
Rizal bin A. Rahman - 2,793 - 121
Derrick Chia Kah Wai 26,000 24,000 26,000 24,000
Seah Boon Chin 6,300 37,062 6,300 37,062
Azlinda Ezrina binti
Ariffin 3,000 3,000 3,000 3,000
Total amount due to
Directors 35,300 66,855 35,300 64,183
These are unsecured, interest free and repayable on demand.
28. INVESTMENT IN SUBSIDIARY COMPANIES
Company
2023 2022
£ £
At Cost
At 1 January 1,976,339 1,976,339
Less: Disposal of subsidiary company - -
At 31 December 1,976,339 1,976,339
Details of the subsidiary companies are as follows:
Effective Ownership of Ordinary Shares
Name of Subsidiary Country of Interest ** Principal Activities
Companies Incorporation 2023 2022
% %
MobilityOne Sdn. Bhd.* Malaysia 100 100 Provision of e-Channel products and services, technology managed services and
solution sales and consultancy
M1 AP Sdn. Bhd.* Malaysia 100 100 Investment holding company
M-One Tech Limited United Kingdom 100 100 Inactive
Direct subsidiary companies of MobilityOne Sdn. Bhd.
M1 Pay Sdn. Bhd.* Malaysia 100 100 Provision of solution sales and services
MobilityOne Philippines, Inc* Philippines 95 95 Provision of IT systems and solutions and to establish a multi-channel
electronic service bureau
One Tranzact Sdn. Bhd.* Malaysia 100 100 Provision of electronic payment and product fulfillment
MobilityOne (B) Sdn. Bhd.* Brunei 99 99 Financial services
OneShop Retail Sdn. Bhd.* Malaysia 100 100 General merchant retail sales in all type of goods, materials and commodities
M1 Merchant Sdn. Bhd.* Malaysia 60 60 Provision of solutions and services in relation to electronic payments via
terminals, mobile devices or any its related business
Onetransfer Remittance Sdn. Bhd.* Malaysia 100 100 Provider for International remittance services
Qube Nexus Sdn. Bhd.* Malaysia 80 - Dormant
* Audited by firm of auditors other than Gravita Audit Limited
** All the above subsidiary undertakings are included in the consolidated
financial statements.
On 14 September 2023, MobilityOne Sdn Bhd subscribed for 80 ordinary shares in
Qube Nexus Sdn. Bhd.("QNSB"), for a total cash consideration of RM80 only.
Consequently, QNSB become a 80% owned subsidiary company of MobilityOne Sdn
Bhd.
29. RECONCILIATION OF PROFIT BEFORE TAX TO CASH GENERATED
FROM OPERATIONS
Group
Restated
2023 2022
£ £
Cash flow from operating activities
(Loss)/Profit before tax (1,369,614) 278,978
Adjustments for:
Amortisation of intangible assets - 68,051
Amortisation of right-of-use assets 96,319 132,580
Bad debt written off 12,131 5,622
Depreciation of property, plant and equipment 248,320 275,629
Depreciation of investment property 6,344 6,631
Gain on disposal of property, plant and equipment (1,437) (8,464)
Gain on disposal of right-of-use assets (3,234) -
Impairment loss on trade receivables 377,411 282,535
Impairment loss on others receivables - 3,403
Impairment loss on goodwill - 177,546
Interest expenses 236,058 137,143
Inventories written off 808 -
Interest income (39,435) (35,933)
Property, plant and equipment written off 20,354 -
Reversal on impairment loss on trade receivable (62,402) (5,061)
Share of post-tax loss of equity accounted associates 123,774 -
Unrealised gain on forex (10,707) (22,279)
Operating cash flows before working capital changes (365,310) 1,296,381
Decrease/(Increase) in inventories 1,276,418 (71,330)
(Increase)/Decrease in receivables (888,275) 474,252
Increase in amount due to Directors & Shareholder (31,555) (57,571)
Increase/(Decrease) in payables 222,656 (2,256,495)
Cash from/(used in) operations 213,934 (614,763)
Company
2023 2022
£ £
Cash flow from operating activities
Loss before tax (274,674) (178,125)
Increase in trade and other receivable - 18
(Decrease)/Increase in payables (9,663) 73,940
Amount owing to/by subsidiaries company 311,886 226,098
(Decrease)/Increase in amount due to Directors (28,883) (121,915)
Cash depleted in operations (1,334) 16
30. RELATED PARTY TRANSACTIONS
At the Statement of Financial Position date, the Group owed the Directors
£35,300 (2022: £66,855), the Company owed the Directors £35,300 (2022:
£64,183), the Company owed MobilityOne Sdn. Bhd. ("M1 Malaysia") £870,686
(2022: £612,703), the subsidiary companies of M1 Malaysia owed M1 Malaysia
£2,483,177 (2022: £399,227) and M1 Malaysia owed the subsidiary companies
£1,815,364 (2022: £469,413). The amounts owing to or from the subsidiary
companies and related parties are repayable on demand and are interest free.
At the Statement of Financial Position date, Hati International Sdn. Bhd. (an
associate of M1 Malaysia) owed the Group £913,550 (2022: Nil). The amount
owing from the associate are subject to 18% interest, and repayable ranging
from one to three years (2022: Nil). During the financial year, the Group
recognised allowance for expected credit losses amounting to £88,268 (2022:
Nil) in respect of the amount owing by associate.
In 2023, M1 continued to rent an office in Sabah, Malaysia from LMS Digital
Sdn Bhd ("LMS") for RM2,500 (c. £460) a month.
On 10 February 2022, M1 Malaysia entered into a tenancy agreement with LMS to
occupy approximately 4,500 square feet of office space at Wisma LMS, Kuala
Lumpur, Malaysia for RM11,250 (c. £2,000) a month. In additional, M1 Malaysia
entered into several ordinary course commercial agreements with TFP Solutions
Berhad ("TFP") for the following products and services:
(i) to integrate eWallet/eMoney into TFP's services and white
labelling the eWallet/eMoney;
(ii) to provide various value added services (including prepaid top-up
and bill payment);
(iii) to provide online payment gateway;
(iv) to provide SMS blasting services;
(v) to provide payment terminals and online payment to accept payment via
credit/debit cards and eWallets; and;
(vi) to use SAP Business One software licenses and services from TFP.
During the financial year, M1 Malaysia paid total lease payment of £29,056
(2022: £22,089) in respect to the tenancy agreement with LMS.
In 2023, M1 Malaysia receiving commission from TFP amounting to RM354 (c.
£61).
Dato' Hussian @ Rizal bin A. Rahman is a director and shareholder of LMS and
TFP.
31. ULTIMATE CONTROLLING PARTY
In the opinion of the Directors, as at 31 December 2023, the ultimate
controlling party in the Company is Dato's Hussain @ Rizal bin A. Rahman by
virtue of his shareholding.
32. CONTINGENT LIABILITIES
The Group and Company have the following contingent liabilities:
Group
2023 2022
£ £
Company
Corporate guarantee given to a licensed bank by the Company
for credit facilities granted to a subsidiary company 4,976,571 5,498,243
Group
Banker's guarantees in favour of third parties 619,665 456,001
The Directors consider that no material exposure arises from the guarantee
given.
33. SHARE BASED PAYMENTS
During the year ended 31 December 2023, the Company did not grant any new
share option to directors and employees of the Group. A total number of share
options of 10,600,000 shares were granted in 2014.
The details of the share options granted in 2014 are shown below:
Grant date 5 December 2014
Share price at grant date 1.5p
Exercise price 2.5p
Option life 10 years
Expiry date 4 December 2024
Up to 31 December 2023, share options of 2,000,000 shares had lapsed due to
resignation of employees and no options had been exercised and therefore the
number of options in issue and exercisable at the reporting date was
8,600,000.
34. SUBSEQUENT EVENTS
On 19 October 2022, MobilityOne Sdn Bhd ("M1 Malaysia") entered into a share
sale agreement (the "Share Sale Agreement") with Super Apps Holdings Sdn Bhd
("Super Apps") for the disposal by M1 Malaysia of a 60% shareholding in the
Gorup's wholly-owned non-core subsidiary OneShop Retail Sdn Bhd ("1Shop") to
Super Apps (together the "Disposal"). Concurrently, M1 Malaysia entered into a
joint venture cum shareholders agreement with Super Apps and 1Shop (together
the "Proposed Joint Venture"). The intention of the Disposal and Proposed
Joint Venture is to establish a new joint venture to expand the Group's
e-products and services business initially in Malaysia.
The Disposal was initially subject to the completion of a merger exercise
between Technology & Telecommunication Acquisition Corporation ("TETE")
and Super Apps which includes certain approvals by the United States
Securities and Exchange Commission ("SEC") (together the "Merger Exercise").
Subsequently it was announced on 1 March 2024 that M1 Malaysia entered into a
supplementary agreement with Super Apps to amend the terms and conditions of
the Share Sale Agreement in preparation for the Merger Exercise (the
"Supplementary Agreement"). Under the new terms and conditions of the
Supplementary Agreement, completion of the Disposal is no longer conditional
on the Merger Exercise completing. In this regard, it was instead agreed that
the Disposal completes upon entry of the Supplementary Agreement.
Notwithstanding completion, if the Merger Exercise does not complete, M1
Malaysia is entitled to purchase back the 60% interest in 1Shop from Super
Apps for a nominal consideration of RM1.00.
It was further agreed that irrespective of the completion of the Disposal and
subject to the completion of the Merger Exercise, Super Apps shall pay M1
Malaysia the following consideration:
(a) RM40.0 million (c. £6.84 million) in cash within 14 days upon completion
of the Merger Exercise; and
(b) RM20.0 million (c. £3.42 million) in cash within 180 days upon completion
of the Merger Exercise.
In addition, pursuant to the terms of the Proposed Joint Venture, M1 Malaysia
undertook to provide the necessary technical and business support to 1Shop and
guaranteed that 1Shop will achieve revenues of at least RM560.0 million in the
financial year ending 31 December 2023 or any other period as mutually agreed
("Revenue Target"). In consideration of M1 Malaysia guaranteeing the Revenue
Target, M1 Malaysia will be receiving the shares of TETE with aggregate value
of RM20.0 million following 1Shop achieving the Revenue Target. In the event
the Revenue Target is not met, M1 Malaysia will not receive the shares of TETE
and will not subject to any penalty.
Tete Technologies Inc, a wholly-owned subsidiary of TETE, has since filed a
draft proxy statement ("TETE Proxy Filing") with the SEC and the TETE Proxy
Filing is subject to the approval by the SEC. The Company will release further
announcements as and when appropriate.
It was announced by the Group on 18 June 2024 that the deadline to complete
the Merger Exercise was extended from 20 July 2024 to 20 January 2025. There
can be no guarantee that the payment for the consideration of the Disposal and
the Proposed Joint Venture can be completed as they are conditional on the
completion of the Merger Exercise, which is out of the Group's control. The
payment for the consideration of the Disposal and the completion of the
Proposed Joint Venture are expected to contribute positively to the financial
position and future growth of the Group.
35. RECLASSIFICATION ADJUSTMENTS
Certain comparative figures have been restated
to better present the nature of certain balances.
1. It was identified that the Group's investment property was
incorrectly categorised as property,
plant and equipment. A restatement was made to recategorise the asset
between these line items. The effect of the restatement was to move the
carrying value of £283,125 from property, plant and equipment into investment
property.
2. It was identified that certain cash deposits with maturity
at origination of more than three months had been included within cash and
cash equivalents. These deposits were represented as 'Other financial
assets'. The effect of the restatement was the move £652,206 from cash and
cash equivalents into 'Other financial assets'. An associated adjustment was
made to the cash flow statement such that only movements in cash and cash
equivalents were presented.
Neither of the adjustments impacted the reported profit for the year, the
reported Earnings Per Share, or the Company balance sheet.
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